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by Maurie Backman | Updated July 17, 2021 - First published on Aug. 22, 2019
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Start 'em young, they say. I'm doing just that.
Of the various cliches you'll hear from the lips of parents, "money doesn't grow on trees" was a big one in my household growing up. And while I sometimes got tired of hearing it, the financial lessons my parents taught me stuck with me once I became an actual adult.
These days, I'm a parent myself, and while my children are still fairly young (my oldest is seven, and I have twins who are four), I believe that they're still old enough to learn a thing or two about money. Here are a few ways I'm getting them schooled.
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This one applies only to my seven-year old son, since my younger daughters aren't old enough to get money to spend at their discretion. What they do know, however, is that their older brother doesn't just get money for things when he asks for it. Rather, he has to earn it. He has chores he's responsible for around the house, and if neglects them, his allowance goes away for the week.
That's an important lesson to learn from a young age, and my hope is that it'll teach my children to never act or feel entitled. My son, meanwhile, doesn't get actual cash, but rather, I add money to a ledger we keep that has a checkbook attached to it from an old checking account. When my son wants to buy something, he writes me a check for that amount, and we deduct it from his balance. It's a good system, and it's taught him to plan his purchases wisely rather than blow his allowance money on things that aren't that important.
Though my daughters are too young to add and subtract, they can count up to a certain point, which means they understand that nine is a larger number than seven. As such, whenever we're out shopping, I try to point out that sometimes, similar items cost different amounts, and that it often pays to go with the cheaper option. My son totally gets this, and so when we're at the supermarket, for example, it's his job to compare loaves of bread and cereal boxes to help me find the best deals.
Last year I took my children on a trip to Disney World. Thankfully, I was able to save money on that trip by staying at a friend's home rather than paying for a hotel, and by driving to our destination instead of flying. And while I was hesitant to battle the large crowds, the kids had so much fun that it was worth every penny.
Meanwhile, there are plenty of times during the week when my kids want my attention, whether to play with them, break up fights, or simply be in the same room. I often explain to them that it took Mommy a certain number of hours to work and earn enough money to go to Disney World, and that if they ever want to go back, they need to let me do my job.
This strategy has worked in other situations, too, and I like that my children are starting to understand that if they want us to have enough money to pay for things, whether it's necessities like food and clothing or luxuries like travel and entertainment, I need to do my job -- because these things don't come free.
Though each of my children has an individual savings account, my son is the only one who's actually interested in what his balance looks like. Some of that money came in the form of allowance cash he chose to put in the bank. In other cases, it's cash gifts he received for birthdays or holidays. My son gets a kick out of watching his savings grow, especially when he sees that he gets money for free in the form of interest. And while he's obviously too young to be responsible for actual bills, he understands the benefit of having a decent savings balance.
Case in point: Earlier in the year, our washer broke, and my son heard me complain on the phone to my husband that a new one would be expensive. He then piped up and offered to chip in a few hundred dollars from his savings to help cover the cost. His logic? He needs clean clothes, so why shouldn't he help? I graciously declined his offer, of course.
If your children are on the young side, you may be inclined to hold off on money lessons. But you never know what information your kids have the potential to absorb, so I believe that once children can count and recognize numbers, they can start to learn about finances. The lessons they're taught don't have to be intense. In fact, I'd encourage you to make them as fun as possible, like when my son shops with me and looks out for deals. The more smart habits your children develop when they're young, the greater the likelihood they'll carry them into adulthood.
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