Have you thought about what you’re going to teach your kids about money? Money & financial education may be as neglected as sex education, and it’s a lot more comfortable to address with your kids.
We can’t provide you with a complete curriculum, but here are some guidelines and suggestions about what to teach your kids and when.
In Preschool:
- Teach your kids to identify the various coins and bills, and learn what each one is worth. This will also help them with decimal systems later.
- Help them understand that they can’t always get what they want, and explain why. They might not understand a Rolling Stones reference, by the way.
- You can get them a “piggy” bank and give them change as you buy things with cash to help them fill it up. There are lots of other options other than pigs though.
In Grade School/Elementary:
- Give them an allowance of some kind, perhaps in exchange for chores, and let them buy some of the things they want.
- At the store, make them read off the price tags and have them understand why you might buy one brand instead of another brand.
- If you buy something in cash, ask them how much change they should get back.
- Open a savings account with them and explain what interest is.
- Perhaps start to have them discuss major purchases and vacations, and the financial implications of them.
In High School:
- Make them work for it! Chores should be mandatory for any kind of allowance or they should go get a real job.
- Get them to budget for larger purchases.
- Teach them how to use a checking account, with real checks. If they’re ever in business for themselves they’ll probably use them.
- Teach them about investing as well, in stocks, mutual funds, CDs, IRAs, and etc.
- Share in financial planning (and saving) for college.
- This might be a good place to reintroduce them to the Rolling Stones (see the pre-school section).
In College:
- If you can trust them, give them a credit card for emergencies. There’s more information about this here.
- Teach them about borrowing, go over interest again and teach them about minimum payments, default, and collateral.
You should also talk to them about your estate planning. Hopefully you’re planning on including them somewhere in the will.