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As a parent who struggled with debt during most of her child’s life (granted, she’s not quite 5 but it’s still a long time), I have made a resolve to teach her the money skills I never learned as a child. I want her to avoid the struggles, frustrations, depression and anger that go along with paying off debt. I want to teach her to be smart about her money and make good financial choices. I want her to have the freedom it’s taken me years to achieve.

Teachable Moments

There are a few ways I’m working toward these goals. The first is taking advantage of teachable moments.  For instance, my daughter helps me go food shopping. She knows that I shop with a list. She knows that we need to stick to the list. She will sometimes help me write the list. She even acts as my “list helper” when we’re at the supermarket (list helper as in a child who walks with me, holding the pen and paper so she behaves instead of running all over the store).   Recently, we were having a random conversation (as 5 year olds are prone to do) and she starting talking about how we need to make sure that we bring a list with us to the supermarket.  I used the opportunity to talk to her about why we use a list and what we put on a list.

Another way I’m working towards the goal is leading by example. Since my daughter was an infant, she’s had a bank in her room. I put my loose change in her bank (I do make her earn it..sometimes but that’s another story) and have had conversations with her about what we’re going to do when the bank is full. I use this as a chance to talk to her about spending, saving and giving. The point is enforced because there is a change jar in the kitchen where loose change will also go. She sees that mommy is saving her money so she knows that it’s not just something I’m telling her to do; it’s something I’m doing myself.

I also am open with her about finances. If we go to a store such as Target for a specific purpose, and she starts begging for a toy that we didn’t go to the store to buy, I tell her “we don’t have enough money for that today” or “we’re not here to buy a toy for you. We need to buy this and only this”. Sometimes, if she wants something and it’s too expensive, I will tell her so and explain that we need to save our money before we can buy it. She sees me using our envelopes to hold our cash, and I’ve explained to her why we use them. She hears my husband and I talking about money and if she asks what we’re talking about, we’ll tell her.  When we’re at a store, I’ll let her pay the cashier. It’s actually a sense of pride for her to pay with “dollars” (it’s how she refers to cash). Being open with her makes her comfortable with the idea of money at a young age.

Then there are two things that we are providing behind her back: her 529 account and an ING savings account. Both accounts were set up shortly after she was born in 2006. Money out of each paycheck gets automatically deposited in her savings account and when daycare ends next year, all out-of-pocket money will go towards her 529 (she does have a few thousand in there but it’s not something that’s regularly contributed to right now).  Although my husband and I cannot agree on when we are going to give her the money in her savings account (I feel that after college graduation is a good time. He keeps changing his mind), we do agree that it’s important to be able to hand her some money to get her adult life started. We also agree that she is not to know about this money because we don’t want to have to fight with her about it.

As far as the 529, my husband graduated with immense student loan debt that will take until we’re at least 40 to pay off; I don’t want to put our daughter in the same position. Fortunately, he agrees with this (although we doubt that by the time she starts college, the amount will be enough to cover all 4 years. If it covers two and we have to pay out of pocket, or by loans for the other 2, so be it).

Teaching kids about money is hard. I still have not figured out how to handle allowances or decided when I think she’s old enough to have a job like babysitting let alone a real part time job.  I don’t know how I’m going to handle a cell phone or a car or anything like that either. Then I remember that she’s not quite 5 and I still have time. But using teachable moments to help her learn about money and not making it a taboo topic is a good foundation for that future!

How do you teach your children about money?

Article publié pour la première fois le 24/10/2011

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