Teaching children about their money
WHEELING – Earlier this year, my 4-year-old son Jack found a quarter in the basement of our home. Amanda, my wife, suggested that he put it in his piggy so he can save his money and buy whatever he wanted to one day. Later that day at his grandparents house, he looked at his pap and said, “Pap, here’s a quarter to put in your piggy bank. My piggy bank is full.”
Although there was a certain sense of pride that he was being so generous, I realized that our gentle reminders of saving had somewhat rubbed off on him. A 4 year old managed to fill up his piggy bank … with a little help from mom and dad. Even though he is only 4, he was somewhat familiar with the concept of saving money for a goal.
Therein lies the challenge though … most of the financial education that children and young adults receive comes from their parents. Although my 15-year high school reunion has come and gone, I don’t recall any of my teachers reviewing such simple concepts as balancing a checkbook, tax advantaged investments, or basic taxation concepts.
Some high schools and colleges are beginning to introduce courses with basic financial concepts. While they are moving in the right direction, it seems they still have quite a ways to go.
I do recognize that getting the attention of a child can be a challenge in and of itself, save discussing financial issues with them. However, with a little creativity and some rewards, you will be surprised how quickly they will pick it up. Whether it be something as simple as accumulating money in a piggy bank for young children or saving money from a job into a savings account for young adults, focus on creating positive habits that they are likely to take into adulthood.
Another way for parents to instill sound financial habits in children is to practice what you preach. By exhibiting prudent spending habits yourself, your children are more likely to follow in your footsteps.
The next time you feel the urge to remind your children that “Money doesn’t grow on trees” (or in ATM machines), use it as an opportunity to sit down with them and help them understand some of life’s basic financial lessons. If we are successful at teaching our children to be good savers and stewards of their money, they are much more likely to be financially successful and responsible throughout their lifetimes.
Jeremy J. Lowe, CFP is a wealth advisor with McKinley Carter Wealth Services (blog.mc-ws.com) an SEC registered investment adviser with its principal place of business in the State of West Virginia. The information contained herein is general market information only and is not intended to be personalized investment advice. Lowe can be contacted at email@example.com or 304-230-2400 or 866-306-2400.