Second generation FI
What are your plans for teaching kids about finances? What has worked well?
My daughter is 4 so we are starting to introduce tradeoffs.
We have some plans for getting a checking account when she is older and telling her about the UTMA+529 but would love ideas.
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We started a dry erase chore chart that hangs on the fridge when my kids were 5 and 3. They earn $2/week. When they want to buy something at a store I'll just ask them "do you have enough saved?" They mostly buy stuffies but my son is currently saving for a toy he saw at Walmart.
Occasional I'll take them to Goodwill, after we look up how much they saved if they had bought it new.
I'm still waiting for them to have buyers remorse but it hasn't happened yet. Trying to make them learn these lessons when the stakes are small.
My kiddos are 5 and 2 and they get money for birthdays and holidays but the only things they ever ask for at the store are snacks. I feel so torn about having them Use their money for this. What do you think? Would it get the same message across do you think?
Our goal was to force them to think about what they value and have to make decisions with limited resources. We want them to have the ownership to make mistakes and learn from them. If they want something and they don't have enough money we'll remind them about what they last bought.
On Halloween we let them eat as much candy as they want. I want then to get a tummy ache so they don't do it the rest of the year. 😃
Saw something neat recently that I might implement when my little one is older. When a vacation is coming up, to help the kiddo pay for trinkets and souvenirs they start moving chore money to a 'fund' where they match the funds. Then similar to most normal ideas, they let the kids choose what they want, explaining gently along the way how much is left after each 'would be' purchase.
Before our oldest turned 5 last year, he started showing an interest in money and how it works. We decided to start paying him every two weeks just like we get paid. He decorated three containers with stickers and paint and labeled them "Spend", "Save", and "Give". We talked to him about the importance of generosity and giving to those in need, the need to save for unexpected things, and the joy of spending on things that you value. Since then, we have been paying him $5 every two weeks. 10% goes to the give container, 30% to save, and he gets to spend the remaining 60%. I keep track of the totals on my phone in case we don't bring the containers with us. There have been instances where we bring the containers because we know he will want to buy something, say at Legoland, and then he gets to make the transaction himself. We want him to get the feel for allocating money to those three categories and then seeing the money leave the container when he chooses to make a purchase. We plan to pay him his age every two weeks and introduce him to other habits like investing and avoiding debt sometime in the future. We got this approach from the book titled "The Opposite of Spoiled" by Ron Lieber. Definitely recommend!
In the same boat with early on in the process with a 4 year old, but similar plans here. We also try to communicate when we buy things it's because of something specific that we value, to start to show that there is a rhyme and reason to what we do and don't spend money on in our family. Hard to say how much sinks in at this point, but with everything else at this age, repetition is the most important. Curious what ideas others have as well!