Here are three practical, simple tips you can use to get your kids started on the road to money-smart learning.
“Gently guide them, but let them make their own choices.”
Kids Under 5 1 – When you’re in a store, give them a few bucks to spend. Let them pick something out. If your experience is anything like mine, they’ll act like you just told them to pick any car on the lot. So many choices! Gently guide them, but let them make their own choices. Remember, you’re just getting them exposed to concepts like comparison shopping and the finite nature of money. Sure, I hoped my daughter would have turned to me and said, “I think I’d rather invest this money, Dad.” That certainly didn’t happen. But now that she’s older, she really does have a certain amount of comfort with money, and I think it’s because lessons like these opened up a conversation. BTW, I first read about this at Thrive by Five, courtesy of CUNA (The Credit Union National Association), but the link is now gone.
“Be realistic though. If you don’t give 33% of your money to worthy causes, then don’t make them give that much either.”
Kids Age 5 and Up 2 – Set up a three-jar system. I didn’t invent the three-jar system, but I did add thinking to the mix with our Spend “Smart” jar to go along with Share and Save. You can use these jars, or make your own, and have your children fill them with any money they receive. Be realistic though. If you don’t give 33% of your money to worthy causes, then don’t make them give that much either. For example, if they get $20 from Grandma, encourage them to put $15 into Spend Smart, $3 into Save and $2 into Share. Of course, the exact amounts are yours to specify based on what you believe. Just remember that the main point here is to get kids used to making choices EVERY time they deal with money and not to necessarily raise the greatest philanthropist of a generation (though that wouldn’t be bad either). Of course, you can go further by instituting an effective allowance.
3 – Have them save for a goal. This is HUGE! Just ask The Marshmallow Man how important it is for kids to understand delayed gratification. Pick out something simple for their first goal, like an item they can save for in a relatively short period of time. For example, we started out our 5-year-old with a $25 scooter. It took her about eight weeks to save for it. It wasn’t too much time that she lost focus, but it was enough for her to delay her gratification and learn a little lesson in the process.
“And whatever you do, start as soon as you can.”
Teaching them about delayed gratification and giving them autonomy over their money sooner rather than later will pay off in the long run. And whatever you do, start as soon as you can. Remember with the youngsters that they are being exposed to the “spend” message by the time they’re two. Expose them to the “share, save and spend SMART” message as soon as you can.
Want to know more? My Money Mammals TV videos might be able to help you out. Let me know what you think or if there’s a topic you’d like me to cover.
John