Kids and money can be a fun mix. My wife and I are doing a few things to teach our kids about money. We have started giving our kids a small weekly allowance. We have started talking to them about spending money and the different devices that we use (cash, credit cards, etc.). Our kids understand that when we work, we are making money so that we can afford the things we have and the experiences. For our kids being six and four, I'm really comfortable with what they learn.
It's great, because there are times when I watch their approach to money and I realize that there are things that they are teaching or reminding me.
Counting Your Money Is Important.
Every week, when my son gets his allowance, he wants to make sure to count his money. Even when he remembers exactly the amount that he had last week, and he knows the new number that the weekly allowance would give him, he still insists on counting it. Calculating your net worth is important, and he's getting started on doing just that!
Set Goals For Your Money.
Our kids both have goals for their money. My son loves Lego and has a few sets that he has his eyes on, as well as the Lego Dimension video game. He knows exactly how much each costs and what he needs to get there. Our daughter has somewhat bigger goals, as she wants to save her money to take us back to Disney World! Bless both of their hearts for having goals!
Enjoy Your Money.
Looking at the examples above, both of the kids understand that it's important to use your money to do things that they enjoy. In both cases, they aren't looking at what they want as something to have, but more at the fun they'll get from having it. It's a good reminder to make sure that you're using your money not just to have things, but to have things or experiences that you'll truly love.
Being Debt Free Is Fabulous.
So much of what we have today is obtained by debt. While in many cases, debt is justified, the simple freedom of having no debt is a great burden to not have to bear. If our kids can't afford something, the solution is just to put the money away and keep saving. That's awesome. Getting something now and paying for it later is something that we will certainly teach them and that they'll grow into, but for now, that simplicity is a treasure.
Everybody Has A Different Money Style.
I love reading all kinds of personal finance blogs, simply because there are so many styles and approaches out there. The same goes with our kids. Even just from the examples above, you can see the differences in how our two kids handle money, track their money, and look at money. Of course some of that has to do with their ages, but even so, it's a good reminder that everybody looks at money in different ways.
Watching our kids learn just about anything is one of the great joys that I experience as a parent. Watching them learn about money is something that is really important, because I feel that the lessons that kids learn at an early age will carry through with them through life. Establishing good money habits now is something that can only serve them well later in life.
One thing that my wife and I both understand is that when it comes to money, as with many things, the best way to teach them is by example. A lot of the positive principles that I learned about money were not necessarily things that my parents taught me by explaining them, but rather by doing them. This is definitely a concept that my wife and I both understand the importance of.
Readers, what have you seen as your kids have learned about money over the years? What are some important lessons that you've established?