Teach Your Kids About Money – Part 01

In this series, I want to discuss the importance of teaching your children about money management.  It is so critically important that children have a sound platform of financial knowledge.  Their knowledge of money (or lack of) will impact their spouse, their own children, their mental health, and their entire future!

Step ONE:  YOU have the primary responsibility for teaching your children about money!

Question:  Who taught you how to manage money?

Think about that question for a moment.

I can tell you this much.  I went from Kindergarten to High School without taking one class taught about money management.  I then went to college for four years and received a bachelor degree without having one class taught about personal finances.  I then went to graduate school for another three years and received a masters degree – still without one class about money management.

Add that up – 13 years of K-12 PLUS 4 years of undergraduate study PLUS 3 years of graduate study – That is 20 years of formal education without one single class on money management!!!  I learned skill sets that enabled me to earn a lot of money, but I had no knowledge of what to do with it once I had received it.

So who do we learn about money management from? 

We learn about money primarily from marketers and our parents.  For better or worse, that is who educates us about money.

There were great things about money that I learned from my parents.  Things like:

  • The value of hard work
  • Work = Get Paid; Don't Work = Don't Get Paid
  • Compound interest is my friend if I am not paying on debt

There were not so great things about money that I learned from marketers.  Things like:

  • If you want it now, go ahead and get it!
  • I'll always have a car payment
  • The use of debt can really help me win financially 

The bottom line is this.  If we do not educate our children about money, who will?  If we abdicate the responsibility to educate our children and we mismanage money ourselves, there should be no surprise when our children make stupid financial decisions.

Question Of The Day:  How have your parents influenced the way you manage money?

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2 Responses to “Teach Your Kids About Money – Part 01”

  1. Nadine Aroyo September 25, 2007 at 1:35 am #

    We are very interested in hearing more about your efforts to bring financial literacy to children, and help them be aware and secure their futures.

    We are OINK! the Business Newspaper for Kids, primarily aimed at 7 to 12 year olds. OINK! is pink, like the Financial Times, full of money matters for kids and is distributed FREE each month upon request to schools, libraries, children’s hospitals and sports clubs across the United Kingdom.

    Over the past four years we have built a steady reputation of bringing information about money and commerce to kids in a fun, creative and highly stylised way. The newspaper’s content is cutting edge, ground breaking and often thought provoking, and has won recognition from the National Literacy Trust and the Schools Library Association as an important literacy and learning tool.

    Amongst our many supporters, we are pleased to include the Bank of England, the London Stock Exchange, the Financial Times, ICICI Bank, Capital Disney, FUN radio, SEGA, Hamleys, SONY, Bandai.

    We have recently introduced the Piggybank® Fantasy Stock Exchange™ which provides kids with a fantastic opportunity to learn all about stocks and shares and play the stock market absolutely free.

    Below please find a link to our websites.

    http://www.piggybank.co.uk
    http://www.fantasystockexchange.biz

  2. Susan Beacham September 25, 2007 at 8:17 am #

    One of the best ways to teach children about money is to let them work with a multiple chamber piggy bank that helps them set goals and then work towards those goals. The Money Savvy Pig piggy bank is such a bank. It allows children to allocate their money into categories of save, spend, donate and invest. A tool like this teaches the skill of delayed gratification, one of the most important skills a child can acquire at an early age.

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