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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: ETBen on June 01, 2016, 05:41:41 PM

Title: Ways to teach your kids about money?
Post by: ETBen on June 01, 2016, 05:41:41 PM
I am determined to teach my kids how to use money. My mother taught me to save but not how to spend. So when I needed to start spending money as an adult, I really had no concept of how to budget to what I had or what things should cost.

Any ideas?  I have grade schoolers.

Today I got them to do the weekly dinner planning (with help), make the grocery list, and then they went around the store working to pick everything out. And paid with cash. We had change left over so I let them spend a dollar each on a donut.
Title: Re: Ways to teach your kids about money?
Post by: PhysicianOnFIRE on June 01, 2016, 06:27:03 PM
A good place to start might be MMM's What Iím Teaching my Son about Money (http://www.mrmoneymustache.com/2015/05/20/what-im-teaching-my-son-about-money/)

There are quite a few books out there, also. Check your local library.

Best,
-PoF
Title: Re: Ways to teach your kids about money?
Post by: NoMoneyMoProblems on June 01, 2016, 07:08:15 PM
Maybe this is too basic for older kids, but my parents paid me an allowance based on chores and other work/merit-based things. Then, they mandated that from that I contributed certain percentages of it to "spending," "saving," and "giving." Might have been something like 60%, 30%, 10% respectively. Pretty sure the giving money went to the church and charities. No idea what happened to the saving money, but notionally you could designate a certain time period before kids could spend it or be very clear that it is for college or a shared family goal or whatever. The "spending" money was mine but I still had to plan out bigger purchases and figured out over time that I couldn't spend everything I had if I ever wanted to buy something more substantial. If I wanted to earn a little more money for allowance than normal, I could do odd jobs around the house/yard that were worth a certain amount. I also had to buy video game time so luckily I didn't become a couch potato! (hey, it was the '80s and I couldn't get enough of Duck Hunt).

Bryan
Title: Re: Ways to teach your kids about money?
Post by: ubermich on June 01, 2016, 08:50:55 PM
I'm not sure if they have a minimum age, but http://hrblock.budgetchallenge.com/ (http://hrblock.budgetchallenge.com/) is a fantastic program that really works the kids out.  To succeed, the kids not only have to keep track of when bills are due and how much to pay, but also to compare things like renter's insurance, auto insurance, and 401k plans.  If your kids are too young for it, I think they're planning to keep it around for a while.  We use it every year and it gives most of my high schoolers a run for their money (no pun intended).
Title: Re: Ways to teach your kids about money?
Post by: Secretly Saving on June 01, 2016, 09:02:09 PM
There is a thread for books associated with financial literacy for kids on the forum.
Title: Re: Ways to teach your kids about money?
Post by: Beriberi on June 02, 2016, 11:47:35 AM
My kids are a little younger. However, the most important thing that I am trying to teach them is that all of our money decisions are about choices.  I never tell them that we can't afford things (well, except maybe a private plane).  I explain that we choose not to spend money on certain things. I try to make it clear that our tradeoffs matter - we are not going out to the fancy restaurant that the kids love, because we can have poststickers at home.  When we go out a lot, it becomes less special.  The money we save means we can afford to buy more art supplies or other non-necessities.

In the longer term, I will introduce the idea that we live well beneath our means and why.

Title: Re: Ways to teach your kids about money?
Post by: Nederstash on June 02, 2016, 12:11:38 PM
I recently saw this great TEDx talk: When money isn't real.

It talks about kids having no real contact with money, so it's just an abstract concept to them. If you give them real cash to handle, they suddenly become a lot more frugal. It's a fun talk, recommended!

https://www.youtube.com/watch?v=_VB39Jo8mAQ
Title: Re: Ways to teach your kids about money?
Post by: boarder42 on June 02, 2016, 12:19:19 PM
my parents gave me my allowance but it wasnt just here is 10 bucks a week.

i had 4 envelopes
1. Savings
2. Gifts for others
3. Spending money
4. Big item (had to cost X much to spend it)

money was equally divided.  My change to the system will be that i will match any dollar my kids put into savings dollar for dollar from 3 or 4. Also if the big item the want costs X and they want to wait for it to go on sale and that price is below the threshold i will let them wait to buy

once i got a job they would match up to 500 bucks that i put in my roth IRA.

as far as spending i went with my dad to the store when he bought things they analyzed which can of black beans was the cheapest.  your kids should be able to help you figure that out at a certain age.  and as they grow older do the math to determine if the can 2x as large is really cheaper. 

when we went "out to eat" which was rare. we had coupons, they didnt drink alcohol out, we couldnt order pop.  at mexican places i would order off the kids menu even past the age and devour chips and salsa.  small things like that throughout my life they picked up on... make it a game.  show that spending less is fun and look at what we get to do b/c of all this fun..

My brother and i had to purchase our own gaming systems b/c they thought they were a waste of time - we always bought last years model b/c it was cheaper and we could get a ton of games with it. 

this was a really cool question to look back on how i was raised as a kid and understand the value of a dollar.
Title: Re: Ways to teach your kids about money?
Post by: ETBen on June 02, 2016, 01:39:06 PM
Thanks everyone!  The search doesn't work for me unless I'm doing something wrong.

This is an important area for me bc neither or I nor their father got basic money lessons. And in talking to my parents, I see how simplistic or wrong much of their knowledge is.