Raising Money-Smart Children

Just recently, Daddy Bry and I attended another parenting seminar offered by Ben's school.  The topic is about how to raise your kids so they'll be smart about money.  It took quite an effort for us to fix our schedules to make it but we weren't disappointed.  Here are the highlights:

(1) Start Early

Toddlers can be taught about money by teaching them to save in a piggy bank and about spending by not always saying yes every time he sees something he likes at a toy store.  Teaching them how to be smart about how to deal with a small amount of money at an early age will enable him to take on more financial responsibilities in the future.  It's also a fun way to learn math.

(2) Be consistent and concrete

Kids like routine and tangible stuff.  It's easier for them to learn about money by seeing cash on hand than a credit or passbook.  If you want them to save for a specific object, why not put a photo of that item on his piggy bank or money jar?  If you do agree that he can buy a certain toy if he saves enough money for it, keep your word (no matter how outdated the toy may be by the time he's able to buy it)

(3) Allowances should be more than enough
This is applicable most especially for kids going to school.  An allowance is an allowance if there is a little something left for them to save or spend as they please.  If you only give exactly enough for their meals, they lose the opportunity to learn how to save and spend for their weekend activities, etc

(4) Spend, Save and Share
How about setting aside a jar for leisure spending, another one for savings and another one for sharing (like donations to church, etc).  How you divide the funds is up to you.  The important thing is to train your child that he doesn't need to spend all his money on one single thing right away.

(5) Involve the whole family

Once your child is old enough, why not involve him in deciding purchases that you make in the household?    The speaker shared about a family who would take turns treating each other even if it's just a scoop of ice cream.  Adults who are wise spenders grew up from families who are honest and open with each other about money.  Oh, and get the grandparents involved, too! Let them know how you intend to discipline your kids when it comes to spending but at the same time give them some opportunity to spoil your kids once in a while.

Something to think about:  It is challenge to find a good place to invest your money but keep in mind that your goal is at least to put it in a place where it grows at an interest rate of at least 5% (to fight off the inflation).  There are a lot of options out there, from conservative to the risky ones.  Lets all do some research and be informed :)