The Benefits of Teaching Children About Money

 

“I now realize that the greatest power in the world is the power of knowledge” (insert lol here if you already know where I’m going with this). The quote, was something that every student from my elementary school and I had to say at the start of every day. Nevertheless, the quote holds true– there is much power in knowledge and the sooner one understands a concept the better. Yesterday, in The First Piggy Bank, I posed the question: how do you introduce the concept of saving to children?  To take that question a step further, when is the best time to introduce the concept of saving to children? The earlier the better. According to Y!Finance, “the benefits of teaching your children about money early on are both immediate and long-term.” It helps in the development of smart saving habits earlier in life and also teaches discipline and self control. Understanding that just because you want something right now doesn’t mean that you can afford it, will save children and parents in the end. I’m glad I shared the tidbit of my first one hundred pennies because it allowed me to dig deeper into my memory bank of children and saving money. One memory definitely comes to mind. I was in high school and my best friend at the time had a little sister in elementary school. Instead of spending her money on snacks and little kid things, she decided one day that she was going to save her money for a limo. I thought it was extremely funny at the time, but admittedly, I didn’t realize how financially mature she was. The little sister, maybe around 5 years old at the time, decided on a goal and chose to cut her spending to save so she could one day afford her dream car, even if it was a limo. Some adults still haven’t mastered this concept in their endeavor to keep up with the Joneses, but that’s for another post.

While tweeting, I came across a link that directed me back to a site that is becoming a quick favorite of mine and a financial must: www.mint.com. Mint and the Scholastic have teamed up to teach kids the basics of money management. Mint education has figured out a way to make learning about personal finance fun with how to articles to interactive games that guides kids to adults through the ends and outs of money management. Personally, I can’t wait to read More Education, More Problems? The Myth of Grad School.. Teaching kids about saving early will help them to respect your hard-earned money earlier in life. Just remember, adults, it is never too late to learn about personal finance and money management. See The 5 Golden Rings to Your Child’s Financial Success to start the conversation with your child/teen or a child/teen that you care for.

  

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The 5 Golden Rules to Your Child’s Financial Success

  1. Children learn what they see. How can you teach children about the horrors of impulse spending when you are guilty of it yourself? Clean up your act, first. In school, kids are taught the basics: reading, writing, mathematics, and science, rarely are they taught money management. Therefore, as an influential presence in a child’s life, you have the opportunity to shape their thoughts and views regarding personal finance.
  2. Make it fun! If it starts to feel like a school lesson, then you will start to sound like the teacher from Charlie Brown. Several online resources available can make learning more enjoyable. For example, the FREE online video game I played yesterday on Mint’s Education page is both fun and illustrates how smart money decisions equals #winning
  3. Break it down so it is understandable. When I was younger, I couldn’t understand why my mom told me we couldn’t afford a monkey (a pet I was totally obsessed with having), when I saw her simply put her ATM card in the machine and magically receive money back for the things she wanted. Explaining where money comes from is a good place to start in the conversation about money.
  4. Stop reinforcing bad behaviors. Merchants put all the goodies closest to the register for a reason. Not only are all of the goodies close to checkout, they are often strategically placed at a child’s eye level. This sets up the stage for several scenarios that counter-act the concept of smart money management. I worked in retail while in college and I saw kids and parents alike get suckered into buying items they had no intention of buying. I also witnessed, more often than not, the adults who bribed children into good behavior with the promise of a purchase. One way to stop reinforcing bad behavior is to explain that we are going into this store for “xyz” and if a tantrum for an impulse buy comes up, explain that if you want the item, you must save “blank” amount of money…also known as establishing financial goals #5.
  5. Make Financial Goals Together. Want a new bike? Video game? Nail Polish Set? Bracelet? Start saving. Adults if you want a new TV, that cute handbag from the other day, or that iPad 2….start saving. If you save and enjoy it, then they will too. In addition, there is much gratification to be found in accomplishing a goal.
     

    OTHER GREAT RESOURCES

    Mint Education

    KidsHealth

    PBS Parents

    Y! Finance

 

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The First Piggy Bank

Last summer will forever be burned into my memory as the summer of 27 Dresses….well maybe more like 6, but that is still doing the most. That’s right, I was in SIX weddings last summer and TWO the summer before that. And guess what? They are now all having babies and their due dates are within weeks of each other. Saturday, I attended the first of four baby shower’s for the spring/summer season for a princess that is scheduled to arrive in June. Shopping for the princess to be, I knew I wanted to get her something special because of the relationship I have with the mom. I also wanted to get the little princess something that she can use when she gets older and remember as something that her Auntie Danielle (yep, I assigned myself as an aunt) gave her before she was a born. So I got her this and I put her name on it:

Ceramic Piggy BankPiggy Bank with Name

A piggy bank from Auntie “She Makes Cents” seems like a perfect fit. Unfortunately, it broke before the mom and dad opened the gift (that kind of hurt my heart). The gift also got me to thinking about when one should start saving. When I was little, I used to pick up pennies from the ground and put them in a red rider wagon. I would be so excited to find pennies and I thought I was rich when I got my first hundred. I poured them on the floor of my room and counted them proudly. That is my first memory of me saving all by myself.

When did you start saving for yourself? How do you introduce saving to children?

Let me know your saving stories.