Learning, Sharing, and Teaching > Mini Money Mustaches

Taught my 5yo about investments and FI today.

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Meesh:
My 5yo got play money for Christmas from my parents. He was asking about debit cards and banks and stuff today and I mentioned the real secret is we don't spend everything in the bank.

Then I pulled out the play money and said if we make $100 a year, we split it into 2 $50s, spend one on our life and save the other. For each $50 in the bank we get another $1 a year. So 1st year you get 1$ but year 2 you get $2 etc, did this for a few "years" to show how it grew.

Then I said lets say we can live off $4 a year, if we have 4 $50's we will make $4 every year forever so we don't need to work anymore.

What's crazy is he totally got it. My DH came home and LO went on and on about it to him, and why its important to save or else DH would have to work for the rest of his life etc. Then when DH mentioned getting a backup pair of glasses, he totally shut him down and said we don't need 2 pairs of glasses and that we should save it! lol

Just sharing because it felt like a win but I'm curious...

When do you guys start these conversations with your kiddos? Do they know your FI goals? How did you guys get your children on board?

FireHiker:
That's awesome! Mine are 6, 8, and 17. I only "found" the concept of FIRE in mid 2015 and really didn't get on board in earnest until about mid 2016 when I got my husband interested in the idea. Until then we did live below our means because we are both high wage earners, but there was a lot of room for improvement. My oldest has a very good understanding on what we do with our money and why, but sometimes he's a teenager who spends irresponsibly. The younger two understand that we spend a lot less than we earn so that we can travel and retire early. We talk about it a LOT so they are constantly exposed to the idea, and the thought processes behind the decision to spend money (or, more often, to NOT spend money). I like the way you explained with the play money.

Meesh:

--- Quote from: FireHiker on January 17, 2018, 12:14:00 PM ---That's awesome! Mine are 6, 8, and 17. I only "found" the concept of FIRE in mid 2015 and really didn't get on board in earnest until about mid 2016 when I got my husband interested in the idea. Until then we did live below our means because we are both high wage earners, but there was a lot of room for improvement. My oldest has a very good understanding on what we do with our money and why, but sometimes he's a teenager who spends irresponsibly. The younger two understand that we spend a lot less than we earn so that we can travel and retire early. We talk about it a LOT so they are constantly exposed to the idea, and the thought processes behind the decision to spend money (or, more often, to NOT spend money). I like the way you explained with the play money.

--- End quote ---

That's really interesting. Do you feel like your oldest is supportive with you trying to FIRE but makes normal teen choices for himself?

I think I'm going to be more open with my son like you are with yours from now on. It's probably healthy to see parents striving for an important goal. Not to mention have a healthier understand of personal finance than most people.

Does anyone have children interested in following in their parents footsteps and are interested in becoming FI too? I guess I want to encourage mine to be FI but ultimately know it is up to him.

Aelias:
Honestly, I think you did it right.  You saw a teachable moment, and you jumped on it in an age appropriate way.  Nicely done!

With our 5yo, we're currently focusing on spending awareness.  For example, he brought home one of those scholastic book club flyers from kindergarten the other day.  It had 4 books that, if bought separately, would cost $13.  If you bought them as a set, it would cost $10.  But, we established that buying just 1 book instead of 4 is cheaper still.  And just going to the library or reading the books we already have is free!

We haven't really discussed saving for retirement yet, but if he asks about it, I'll probably try to do it the way you did.  We've covered the basic concept of interest, so that may help.  We also explained what a mortgage was and how much, in real dollars, we paid for ours.  When he heard how much our relatively modest mortgage payment was a month, he did an actual spit-take. "That's a lot of money!"  Yup--and that's why we work and don't spend our money on random stuff!

Fin Drill Instructor:
We started playing CASHFLOW for KIDS Board Game (Robert Kiyosaki) with our then 5 year old. He now understands concepts of assets and liabilities and why it's bad to have a lot of payments and it's good to have cashflow. Also, when he asks for something in a store, we don't say that we don't have money for it, but we say that it would not be a good financial decision. 

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