by Tricia
My son is only five years old right now (soon to be six, though!). He doesn’t really understand many things about money, but I’ve still been trying to do a few things here and there to help him grow up to be responsible with money. We are going to give it our best shot to give him good money management skills.
Thanks to another blogger holding a contest, I was able to get a Money Savvy Pig for my son for free. This special piggy bank has four slots where kids can put their money: Spend, Save, Invest & Donate. It has been fascinating to watch my son divide up his money. I thought he would put everything into the spend slot, but he has put money into all of them. He’s a little confused as to what it means to donate (he keeps trying to give Mom and Dad the money in the Donate slot LOL), but hopefully with the Christmas season soon upon us, he’ll understand it a little bit better. We’ll give him choices as how he can donate his money.
I’m also planning on giving him a special extra bonus when he loses his first tooth. Along with a gold dollar (if I can get a hold of some), he will get a $25 savings bond from the tooth fairy. When he’s older, he can see how much money that savings bond grew into.
Probably the hardest part (but also the best part) is to teach him about spending money wisely. He often sees toys on TV or in the store and says, “I want that!” Times like those, I try to point out similar items he may already have at home. If it’s construction related, that is pretty easy to do. Other times I may try to show him similar items that are more affordable. Another thing that I do is to point out things I would like, but I do not buy them. I try to show him by example that sometimes there are things Mommy and Daddy want as well, but we do not buy them. I also now talk through my thought process when comparing what items to buy so he can listen in and be an active participant.
This older article from Forbes agrees about the role model part:
“As a parent, the best way to teach a child about finances is to be a role model,” says Edward Powell, chief consumer officer at LendingTree.com in Charlotte, N.C. “You should show restraint with money. Your child should see you budget, comparison-shop and make regular contributions to a savings account. It’s not enough to talk the talk, you’ve got to walk the walk.”
[Via Forbes] (thanks Amy for the link!)
There is a balance, though. While you want to make sure your children understand spending limits and budgeting, I don’t think you should let them in on your specific financial situation. For my son, he has no idea right now about our debt situation and he likely won’t know about it for some time. He still has the right to be a kid and not be burdened by our financial problems.
For those of you with children, is there anything special you are doing to try to teach your children about money?
That reminds me, it’s almost time to do a little personal finance interview with my son again (we did one when he was four and did another one when he was five). I love hearing his answers 🙂
