It's never too early to teach your child about money
Is it ever too early to teach your child about money? The answer is “no”. From the time you start reading them stories, you’ll find all kinds of examples that can help your child learn about honesty, hard work, and money.
As they grow older you can teach them about saving, buy them their first piggy bank and show them that though money is important, wisdom, love, family and integrity are more important than getting money at all costs.
So here are seven things that are important to teach your child about money.
1. Money represents your life’s effort and toil.
What you are conveying here is that money is important in the sense that it’s what we spend a third of our lives indirectly (in school) and directly (at a job) earning. When you do spend money, it should be be considered in that light, not flippantly.
This is not to say they should not have fun or leisure, but being mindful of how the money came (through 8 hours a day at the job for most) will help them make better decisions about money.
2. Don’t be Greedy
Money is always, always secondary to wisdom, love, and integrity. I cannot tell you about how many empty sad people I have met with a ton of money, but you can read about all the suicides and wrecked lives of the the Hollywood rich and famous yourselves.
I can also tell you about the sad, rich girl who jumped from the sixth floor of a luxury apartment building and landed right behind me in the parking lot at midnight years ago. Don’t be so fixated on money that you lose track of what is important.
3. Work Hard
Kids should be taught the importance of having a work ethic, to work hard to earn for the things they need and to provide for their loved ones. Various kinds of work have value. Kids should be taught that being a homemaker has great value as well, not necessarily through a paycheck, but value nonetheless.
In school, kids should be urged to work hard. Workers with university degrees still earn significantly more than those without, so hard work is not something that begins after college. It starts many years before.
4. Be Wise About Money
Kids should be taught basic wisdom about money. Things like not cosigning for others’ debt and not living beyond their means.
By example, let your kids know they should never neglect loved ones through overwork or try to substitute their time with them for expensive gifts or cash.
If they will learn such lessons from you, it means you have to know them. So learn about money and share the knowledge with your children.
5. Be Generous
You should teach your kids to give and be generous. They should learn to share with less fortunate and to pay it forward. It is no accident that some of the most philanthropic and generous people in the world are also some of the richest.
I refer of course, to Bill Gates and Warren Buffet, but also to many other lesser-known billionaires and millionaires who are incredibly generous with their hard-earned money. Teach them that those who refresh others will be refreshed themselves.
Teach your kids also that time = money and volunteer with them at helping the poor, for example at a soup kitchen.
6. Save Consistently
Teach your kids to always put something aside something fro each paycheck or gift for a rainy day or for unexpected expenses as well as expected ones (i.e., retirement). About 56% of U.S. workers say they have less than $25,000 in savings and investments and over 74% say they plan to work after retirement age.
The harsh reality is that most people have not saved enough for retirement and this often leads to indignities at the most frail part of peoples’ lives. This is one lesson your kids will thank you for later in life.
7. Learn to Invest
Your children should learn that many who have created wealth have invested in their ideas to create that wealth. Teach your children to invest – they should know all about stocks, bonds, mutual funds, money market accounts etc. For Christmas or birthdays, buy them savings bonds in addition to or in lieu of all those plastic, soon-trashed Chinese-made toys. Get them something valuable and teach them the value of compounding interest.
However, teach other lessons, such as the value of ideas in the information age. Teach them to use other people’s money for business, risk management, and the value of sweat equity in starting a business.
If you teach your kids these lessons, then you are likely to see a successful, generous son or daughter who makes a positive impact on the lives of people around them in a few short years.
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