Personal Finance Success – Part 3: What Should I be Teaching My Kids?

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Personal Finance Success – Part 3: What Should I Be Teaching My Kids?Financial skills are crucial when it comes to navigating through life; it is actually quite surprising that most schools aren’t teaching children about money. As responsible parents, we should be teaching our children the basic and important financial lessons right at home. But what is it we are to teach and at what age should we start introducing these basic money lessons?

 

As we conclude our personal finance series, we move on to an area many don’t think about until it is too late, our children and money. This week we will be discussing the basic money facts you should be working on with your children right at home, and once again with the help of USAA’s, JJ Montanaro. 

 

Angela: At what age should we start teaching children about finances?

 

JJ: I would start as early as possible. Granted you won’t be pounding your 6-year old over the head with the power of compound returns and the time value of money, but you could certainly start talking to them about money. One cool thing USAA has handed out at a number of family-oriented events I’ve participated in is a workbook by Ellen Sabin, “Nickles, Dimes and Dollars.” It’s actually a great start point for money conversations with your kids.

 

Angela: What aspects of finances are appropriate to teach children early on?

 

JJ: Even at an early age you can start driving home a couple of key money concepts, concepts that a lot of folks don’t get until much later, or just don’t get at all. Concepts like needs vs. wants. Being able to differentiate the two and make decisions regarding what’s what is a powerful tool in your financial arsenal and as a parent, you can work that one early. I also really like those piggy banks that break down savings into different divided sections as a way to start the money learning process. As the kids get older, the lessons can continue. I know at our house we used allowance as a money management tool, matched savings and used every opportunity to share the golden rule of personal finance with your kids: “spend less than you earn and save some to boot!”

 

Angela: Is it prehistoric to teach kids how to balance a checkbook when everything is electronic these days?

 

JJ: I don’t know if it’s prehistoric, but you do want them to understand how a checking account works. We never taught our kids to balance a checkbook, but we have certainly spent time on the importance of monitoring their accounts, account balances and activity. In effect, balancing a checkbook is just another way to say what goes out shouldn’t be any more than what comes in!

 

Angela: What are the top 5 most important money lessons to teach kids?


JJ: That’s a tough one. I think we’ve discussed a couple of “top-fivers” already: spend less than you earn and differentiating needs vs. wants. To that I’d certainly add the power of compounding interest or returns. A little effort that starts early can go a long way towards helping our kids have a secure financial future. A lot of folks that I’ve worked with have felt strongly about planting the seed of giving early in their children’s lives and that makes sense to me and finally I’d love kids to know that money doesn’t grow on trees. While there are no guarantees, hard work, education and commitment normally result in powerful outcomes.  

 

Have any questions or tips to add? Ask us below!

 

Related stories:

Personal Finance Success Part One – How to Build Credit
Personal Finance Success Part Two – How Much Do I Need to Retire

 

About the blogger:
Angela Caban is an Army National Guard spouse, freelance writer, published author and branding expert. Her husband was one of the many soldiers impacted by the unprecedented activation of the National Guard in 2008. In 2010, she founded the Homefront United Network, a military spouse and family support blog created to assist spouses who do not live near an installation, but also focusing on bridging the gap between National Guard, Reserve and Active Duty spouses. She is also co-founder of SpouseTalks. As a branding and digital influencer, she has created content for A&E, Lifetime Network and PBS. She has an extensive background in Human Resources and Communications, with her Bachelor’s in Business Administration and a Master’s in Human Resources. Angela resides in the beautiful Garden State of New Jersey with her husband and two children.