Teaching kids about money.

[Anonymous]

My kids are grown but I’m wondering how
It’s going with younger kids. How are you teaching them about money now that it is mostly intangible? Is it harder, easier? Just curious.

[Anonymous]

Take out some cash and teach them.

Then teach them expenses and income on a balance sheet. Track expenses for a while and show them.

Show them where you invest and why.

Teach them how to write a check and take them to the bank to deposit.

No, it's not hard or harder now.

[Anonymous]

Pating for chores work well at the younger ages. They love to count it all up periodically.

[Anonymous]

Anonymous wrote:Take out some cash and teach them.

Then teach them expenses and income on a balance sheet. Track expenses for a while and show them.

Show them where you invest and why.

Teach them how to write a check and take them to the bank to deposit.

No, it's not hard or harder now.

I disagree and think it is harder. I lead a Girl Scout troop and as we were working through the finance and money badges associated with selling cookies, we found that the current use of online shopping and credit cards makes many aspects of finances that came naturally to older generations pretty opaque for children today. With things like grocery delivery and busy schedules, many kids aren’t standing next to a parent looking up unit prices and comparing two sizes of peanut butter jars, or deciding if the out-of-season fruit is oddly cheap and worth buying.

When I was a kid, we had to constantly weigh tradeoffs that were strictly defined by using, say, a $5 bill at the gas station or pool for snacks. Spend $1.50 and you get change and bills back. You see them. You think about them. You spend them and they’re gone.

And with that money came tangible decisions and forced trade-offs: Do you save the change up and be careful not to break the bills on something silly later like 25 cent candy? Do you keep the $20 bills from grandma for your birthday or do you spend it on a cassette you really want but then waste the change?

The shopping area closest to my house has zero stores except for the grocery store that accept cash. The pool snack bar doesn’t take cash. School events are all done via pre-paid tickets. Even though my daughter wants to learn to budget and use cash, she’s stuck with a greenlight card or my credit card or getting paid for babysitting via Venmo.

My Girl Scouts could barely handle paper money and coins, let alone process the kinds of subconscious tradeoffs I was already making at a much younger age in the 80s. Unfortunately I have yet to figure out how to create a true sense of money and value for these kids and for mine, which I think is a necessary foundation for more complex financial literacy.

[Anonymous]

I grew up without any financial literacy (parents bought me pretty much anything I wanted, even paid my rent for quite a long time) and it really damaged me in the long run.

My oldest is almost 10, so I’ve started having her sit down with me every week when I do the budget so she can see how I track everything in the spreadsheet. I’m also opening up a HYsA for her so she can see the interest she earns every month as an incentive to save.

Every month the kids get “fun” money and when it’s gone, it’s gone. No toys, McDonald’s, etc until the next month. I’d rather they feel the pain of running out of money now than when they’re 20s/30s.

We also talk a lot about marketing and how it tricks people into buying things. I work in marketing so I’m able to point out a lot of that stuff.

The one thing I really wish my parents had taught me was how taxes, investing, debt, etc all work. I had zero idea until well into my 30s. It’s boring, but as my kids enter the teen years I plan on making them learn about all that boring stuff.

[Anonymous]

Anonymous wrote:I grew up without any financial literacy (parents bought me pretty much anything I wanted, even paid my rent for quite a long time) and it really damaged me in the long run.

My oldest is almost 10, so I’ve started having her sit down with me every week when I do the budget so she can see how I track everything in the spreadsheet. I’m also opening up a HYsA for her so she can see the interest she earns every month as an incentive to save.

Every month the kids get “fun” money and when it’s gone, it’s gone. No toys, McDonald’s, etc until the next month. I’d rather they feel the pain of running out of money now than when they’re 20s/30s.

We also talk a lot about marketing and how it tricks people into buying things. I work in marketing so I’m able to point out a lot of that stuff.

The one thing I really wish my parents had taught me was how taxes, investing, debt, etc all work. I had zero idea until well into my 30s. It’s boring, but as my kids enter the teen years I plan on making them learn about all that boring stuff.

Good on you! You sound like a really terrific parent!

[Anonymous]

Anonymous wrote:I grew up without any financial literacy (parents bought me pretty much anything I wanted, even paid my rent for quite a long time) and it really damaged me in the long run.

My oldest is almost 10, so I’ve started having her sit down with me every week when I do the budget so she can see how I track everything in the spreadsheet. I’m also opening up a HYsA for her so she can see the interest she earns every month as an incentive to save.

Every month the kids get “fun” money and when it’s gone, it’s gone. No toys, McDonald’s, etc until the next month. I’d rather they feel the pain of running out of money now than when they’re 20s/30s.

We also talk a lot about marketing and how it tricks people into buying things. I work in marketing so I’m able to point out a lot of that stuff.

The one thing I really wish my parents had taught me was how taxes, investing, debt, etc all work. I had zero idea until well into my 30s. It’s boring, but as my kids enter the teen years I plan on making them learn about all that boring stuff.

This is what I was thinking about. Thanks for sharing your experience.

[Anonymous]

I think it's harder now as cash and checks are less common. We watched our parents pay bills and take their pay checks to the bank. Now a lot of that is invisible. Opportunities for kids to use cash (book fairs, school holiday shops) often involve buying crap - so I try to stay away from those, but do try to use the pool snack bar and local pizza place. I don't do an allowance but will pay small amounts for things like cleaning out the car. Not sure how it is going.

[Anonymous]

We have talked about every money topic under the sun. It's my interest and they don't have a choice, but to suffer through it. I also have a finance degree.
DC2 is taking a personal finance class right now in middle school. He comes home to tell me all about it.
Both boys have my credit card to use and have been very responsible. No need for a budget at all. Their needs and want are very reasonable.
We are concentrating on investing now, because older child is working and younger one has an inheritance coming.

[Anonymous]

There are several processes that elementary age kids must know about money. And all of these have to be taught in parallel.

A) To earn
B) What you earn vs what you have to pay/put aside.
C) How to track all your spending. How to budget.
D) How to allocate the money for day to day living for every pay cycle.
E) How credit card debt works.
F) Compounding your money
G) Long term and short term goals

[Anonymous]

Anonymous wrote:We have talked about every money topic under the sun. It's my interest and they don't have a choice, but to suffer through it. I also have a finance degree.
DC2 is taking a personal finance class right now in middle school. He comes home to tell me all about it.
Both boys have my credit card to use and have been very responsible. No need for a budget at all. Their needs and want are very reasonable.
We are concentrating on investing now, because older child is working and younger one has an inheritance coming.

Makes no sense

[Anonymous]

Kid had an 8th grade math project in DCPS where they had a few things randomly assigned to them like what college they go to, what major, how much in loans they had to take etc. they the. Had to research where they would get jobs, what the pay would be, budget for buying a car, rent etc. Then they had random life events happen like the car getting totaled. This was amazing because DC now is very sober about going to an affordable college, how much gets eaten by taxes, how to save for a rainy day etc etc!

[Anonymous]

Show them by example. If they see you paying bills on time, never spending more than budget, not carrying debt, living within means and emphasizing value of financial peace, they'll take notice.

[Anonymous]

Most important thing is to not carry credit card debt.

[Anonymous]

I use cash. Giving them a 20 dollar bill and having them find an item and check out and get change is the best way to teach how much items cost. Its getting harder with more digital only places. In those instances i have them give me the cash and i pay credit and then make change from my own wallet.

I go to the atm or bank every month or so.

They also have savings accounts and we look at the paper statement each month and talk about interest earned and any add or deductions from the account. I had to fight capital one to send the statements they tried to tell me they were only digital. It is literally labeled a kids savings account. I told them a paper statement was required for the kid to access it and they relented.