General Discussion
My young scholars are always asking me to buy them a new toy or the latest pair of shoes. I used to allow them to look on Amazon and share with me what they wanted to purchase. I also would ask the cost of the item and would approve or decline based on if I thought the cost was too expensive or not. My daughters would always respond that the item did not cost too much even if I thought the price was too extravagant. I will explain how I taught my children to understand money by teaching them personal finance.
My first lesson with teaching personal finance to my children came from rewarding them with an allowance after they completed all of their chores for the week. I would give them a checklist on Sundays and shared my expectations of how I wanted them to get their chores done. If they completed the chores to my expectations, then a monetary award would be provided to them each week. I would first take out 10% for their Tithes and then give them the rest. They had the option to save all of the money in their bank account or keep a portion and deposit the rest. We would have a family count at the end of the month to see who was the top saver. The top saver would be awarded an additional $5 to add to their monthly total. Both girls quickly learned that if they saved most of their money they could receive more money.
My second lesson with teaching personal finance to my children came from helping them understand how not to be selfish. I would visit a local department store and let them know ahead of time that I was not going to buy them anything because today we were going to buy their mom a gift. Ofcourse, this did not go over well because they would still pickup items as we walked through the store. I would quickly remind them that we were only there to purchase items for their mother and they could not spend any money on themselves. They began to understand this concept after several visits to the store that resulted in them crying or being upset that they could not buy anything. I wanted them to understand that they could not get everything they wanted all the time.
My third lesson with teaching personal finance to my children came from teaching finance vocabulary terms and exposing them to children finance books such as Sally Saver (sallysaverseries.com). I was surprised at how quickly they learned finance terms and used them during our weekly finance discussions. They frequently used terms such as debit, credit, budget, savings, deposit, income, assets, and more. I would share how my individual stocks were doing based on the market and they would ask specific questions about our family investments.
My last lesson with teaching personal finance to my children came from giving them a set budget of what they could spend from their Greenlight card account (greenlight.com). As they received allowances each week, they were allowed to spend a small amount of their funds on toys or other items. They would pick out an item to purchase and decide if they had enough money for the item or if they needed to put money aside each week to save up for the special item. Once they met their goal, I would allow them to purchase the item and reward them with a few extra dollars to cover the tax. My children quickly understood the power of delayed gratification.
In conclusion, I used several techniques to expose my children to personal finance at a young age. As they got older, I continued to expose them to more complex strategies to further their understanding of money. I am interested in learning how you expose your children to personal finance.