I was raised a middleclass kid. My Dad had been poor growing up, but he worked hard and he was able to give our family the benefits of the American Dream. We weren’t rich, but we didn’t want for a lot. Mom and Dad may have worried about money occasionally, but they didn’t let us know that they did. As a consequence of this generosity, I really didn’t understand a lot of things relating to money. At Macy’s, my first post-college job, I ran up a huge (relative to the times) $500 credit card bill in a matter of months. I just didn’t get it. I didn’t understand how to put away for a rainy day. I didn’t get compounding interest. I just did not know how money worked, what things cost or how to save. Fast forward about a million years and my own kids have had a totally different experience. Even though their Dad is an attorney, and they grew up in the world that that lifestyle allows, they were raised to understand more about money than I ever was. We taught them about saving and about what things cost.
Money lessons are vital to a child’s future success… I’d say that this information is as important as learning Math, English and History. A lot of these lessons, however, are not being taught in school. So guess what, people, it’s your job… like it or lump it… as the parent or grandparent… to help kids through the money maze. The more you help them to understand and de-mystify money, the better they will be at handling it for the rest of their forever.
Set an Example Because Actions Always Speak Louder Than Words
You know what “they” say… they can tell you they love you till they’re blue in the face, but when they show you they love you…. ahhhh! The same can be said of money. If you show kids a good example with money, they will live a good example with money. According to a 2020 Forbes article, “Just as important as the lessons you teach your kids about money are the ways you discuss and handle money when you’re around them. For example, if you complain about having to spend too much on certain things and then take your kids on a shopping spree, you’re sending mixed messages. Instead, make sure you model the behaviors around money that you want your children to adopt.” So remember… they are sponges… and they are watching. Set a good example in how you spend money and how you talk about money, and your kids/grandkids will reap the benefits.
Give Kids Opportunities to Earn Money From an Early Age
I babysat Anthony Mendello from the time that I was twelve till about the age of 16. His mom was an an amazing business woman and a builder when women just weren’t. She also was no fool. As I babysit little Anthony, I was also charged with ironing shirts for her husband – and all for $1 per hour! (It’s why I hate ironing to this day, but that’s a topic for another blog). But hell, I was earning my own money, and truth-be-told, I was loving it! It was a good thing. If you give your kids opportunities to make money (I’m not talking about cruel, child-labor here) kids will start to have an appreciation for money. Think about paying them to do the extra-ordinary: raking the leaves, shoveling the driveway, cleaning the garage. It’s a great way to start the money lessons.
Create 3 Jars: Spend, Save, Share.
Ok, so you’re setting a good example with your own spending and speaking about money, and you’re also giving them opportunities to make some money of their own…so now what? If you set them up for success, most times they will succeed. Showing kids what money is for is easy with the three jar system. When money comes in from their little jobs… give them three places to “put” the cash: spending, savings and sharing. By doing this you create a thoughtful spender for life and you let them know that it is important to share with those less fortunate. If they make $10 perhaps they allocate $4 for spending, $3 for saving and $3 for giving (then, when the Share jar gets a bit full, help them chose a charity that’s meaningful to them or your family – it’s a HUGE life lesson that can’t be under-estimated). Three jars is so easy and can be comprehended by all but the youngest kids. Kids that understand money will become adults who are good with it… you’ll be so glad you taught this lesson early.
A Final Thought…
Some people think talking about money is weird or uncomfortable… but we all need it to live in this world. The earlier we lose the awkward surrounding money, the sooner we make kids that are smart stewards of their treasure. As always… stay safe out there, my friends… and have fun!