Teaching kids money and investing fundamentals


teach kids about money image credit: Good Search

In the Wall Street Journal, I came across an article about Judith Ward, a financial adviser, who shared her experience teaching her children to save and invest money.

The steps in this article were very familiar to me. My mom did much of the same for me that Judith did with her kids. My mom isn’t a financial adviser, and you don’t need to be, either. Just remember: KISS, Keep It Simple, Sweetie. Don’t overwhelm your kids with the details, or scarcity stories.

Judith opened savings accounts for her kids when they were in elementary school. She’d take her kids to the bank to make their deposits and review their monthly statements with her.

As a child, I’d often gone to the bank with my mom and seen her deposit money into her account. She’d give short lessons, without me knowing announcing, “This is a lesson.” She’d say things like, “I put money in so we can buy food/clothing/Girl Scout uniform when we need it.” When I was thirteen, my mom took me to the bank and I opened my own savings account. I’d save money from the jobs I had—ironing and babysitting, and we’d make trips to the bank together to deposit our money. When I got a bank statement, mom showed me how to read it. I loved the reward of seeing the amounts go up!

As Judith’s children grew older, she’d show them her paychecks, and her monthly bank statements with them as a learning tool. She’d also share her investment statements with them.

My mom didn’t show me that information, but she did tell me things like, “Every little bit of savings makes a difference for now, and the future.”

Judith shared how she explained to her son, now 23, how to invest when he opened up a retirement account. If he invested every month—whatever the market was doing, he’d get fewer shared if the market was up, and but more shares if it was down. That’s known as dollar-cost averaging, but she, didn’t use fancy financial adviser terms on her son. She used what he could understand, and because it made sense, he’ll probably stick to saving money.

How do you talk to your kids about money? Are you trying to teach someone how to budget, or invest? Or, are you in process of learning yourself? KISS. KISS. KISS. Keep It Simple, Sweetie.

 

Teaching kids money and investing fundamentals


teach kids about money image credit: Good Search

In the Wall Street Journal, I came across an article about Judith Ward, a financial adviser, who shared her experience teaching her children to save and invest money.

The steps in this article were very familiar to me. My mom did much of the same for me that Judith did with her kids. My mom isn’t a financial adviser, and you don’t need to be, either. Just remember: KISS, Keep It Simple, Sweetie. Don’t overwhelm your kids with the details, or scarcity stories.

Judith opened savings accounts for her kids when they were in elementary school. She’d take her kids to the bank to make their deposits and review their monthly statements with her.

As a child, I’d often gone to the bank with my mom and seen her deposit money into her account. She’d give short lessons, without me knowing announcing, “This is a lesson.” She’d say things like, “I put money in so we can buy food/clothing/Girl Scout uniform when we need it.” When I was thirteen, my mom took me to the bank and I opened my own savings account. I’d save money from the jobs I had—ironing and babysitting, and we’d make trips to the bank together to deposit our money. When I got a bank statement, mom showed me how to read it. I loved the reward of seeing the amounts go up!

As Judith’s children grew older, she’d show them her paychecks, and her monthly bank statements with them as a learning tool. She’d also share her investment statements with them.

My mom didn’t show me that information, but she did tell me things like, “Every little bit of savings makes a difference for now, and the future.”

Judith shared how she explained to her son, now 23, how to invest when he opened up a retirement account. If he invested every month—whatever the market was doing, he’d get fewer shared if the market was up, and but more shares if it was down. That’s known as dollar-cost averaging, but she, didn’t use fancy financial adviser terms on her son. She used what he could understand, and because it made sense, he’ll probably stick to saving money.

How do you talk to your kids about money? Are you trying to teach someone how to budget, or invest? Or, are you in process of learning yourself? KISS. KISS. KISS. Keep It Simple, Sweetie.

Teachable Money Moments with Your Child


teachable momentsImage credit: Good Search

Chances are, you weren’t taught about money. If that’s the case, hopefully you’re changing that pattern with your kids. No matter how old they are—even if they are at college, or raising kids of their own, it’s not too late to teach them. This of course, comes only if they’re willing to hear you out. There are ways to take advantage of teachable moments. If they’re not willing to listen, back off—but then don’t give in to kiddie tantrums or phone calls for money. I recently read that baby-boomers are far worse off than their parents when it comes to knowing how to save money. Their parents may not have had as much, but they knew how to save—and did. Begin now to teach your kids and your grandkids easy ways that add up.

One teachable moment can be offering choices. “The two things you want are out of your budget. You can get this toy for $1 today, or save and get that toy for $5 another day. For older kids, you can give them an allotted amount for clothing and tell them “This if what I’ll put toward your shoes. If you want the more expensive ones, you need to make up the difference.” If you send your teen to the grocery store for an errand, give them guidance. Send them off with a coupon for what you want, give a price range, “Get bananas if they’re less than .50 lb”, or give them directions to buy what’s on sale, “If bananas are more than .50 lb, see what’s on sale. Check the prices on strawberries.” If they have a cell phone, you can always ask them to call you from the store if they have questions. If retired husbands can do this, so can kids. For the child who moves back home and still spends money. Have them pay rent to you for the purpose of you putting the money in a special account to be given to them when they’re back on their feet, and have enough money put aside to move out.

You get more bees with honey. Praise your kids for things done right. If you can, do this in front of someone else. This includes good behavior and wise money choices. A phrase like “You’ll be so proud of  Joey for how well he handled his $1.00 at the store today” is a better reinforcement than, “You’ll never guess who behaved at the store today!” Make sure your praise is genuine and not sarcasm, or a left-handed compliment.

Eat before you go shopping. I remember as a kid and into my teens going shopping with my mom. If it was around lunchtime, we’d always eat at home before heading out. Two reasons: To save money. To keep blood sugars and therefore emotions in tact. As I got older, I’d insist I wasn’t hungry, and that I’d be fine. We’d pull into a parking lot and sure enough, I was hungry! I wasn’t interested in eating out, I just had a high metabolism, and if I hadn’t recently eaten, hunger pangs and crankiness set in. Like magic, my mom would pull a cut apple or some other form of portable sustenance from her purse. As an adult, I know I can go from not hungry to head-spinning hunger. If I’m headed out the door, I’ll bring food with me. A banana, a cut apple, some crackers, cuties or a sandwich for mid-trip. If you tire of a cranky child, try staying a jump ahead, offer a snack at home or in the car on the way to your errands.

Everyone will be better off.