Today's post is written by Katie.  Katie is a HUGE help to the crusade!  She coordinates all financial counseling appointments, manages my schedule, and helps ensure that the crusade to help others accomplish far more than they ever thought possible with their personal finances rolls along smoothly.

Anyway, she and her husband (Matt) are the proud parents of two beautiful children – Cameron (4) and Claire (<1).  Today, Katie shares how she and Matt are training Cameron about money.

Since our son is only four years old, we are teaching him that there is value to everything and that we use money to buy the things that we need. Because money is limited we teach him not to be wasteful. One of his favorite things to do is to pour milk down the sink (who knows why). I have started explaining to him that we paid money for that milk so we need to save what we do not drink because it is worth something. When we go shopping I am constantly talking to him about how we have to pay the store money before we leave because those items are worth something and we have to exchange our money for them. When he asks for a treat or something at the store I have to tell him that we only have x amount of money and that costs more than what we have to spend since we are buying other items to eat for meals.

Sangl says …  It is never too early to start teaching children about money.  Jenn and I started teaching our daughter about money when she was four years old too.

By the way, Matt and Katie's son is super-smart.  He has learned the books of the Bible and can say them without help – backwards.  Watch it HERE. 

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Ever since Jenn and I had our I Have Had Enough Moment with living paycheck-to-paycheck and B-R-O-K-E and living the three-time-loser-with-credit-cards life, we have made it a huge priority to teach our daughter about money management.  It became a HUGE priority when we realized that she has inherited my "spender" genes!

In this series, I will be sharing some practical ways that we are teaching her about sound money management.

Part Three – Waiting

To put it bluntly, waiting sucks.  I despise lines.  I detest waiting rooms.  I deplore delays.  Waiting is no fun.  I have routinely said, "If I had wanted patience (patients), I would have become a doctor."  

Yet, it is absolutely true that patience is a virtue.  If one spends money based on snap decisions without the beauty of time between the "I WANT THAT!" moment and the purchasing moment, there will be huge opportunities for regretful decisions.

There have been times that I have had our daughter leave her short-term savings at home when we go shopping.  Why?  Because I have observed the wishy-washy decision making that she is highly susceptible to (I've even written about it HERE).  First she wants a Webkinz, then a bunny rabbit (yes a live one), then it is bunny rabbitS (plural!), then an iPod, then …  Children are such a reflection of their parents.  I'm sorry you have got my "spender" genes, my beautiful daughter.

By leaving her money at home, it opens the door for me to have conversation about the important financial principle of "waiting".  Yes, honey, it is no fun, but just think about the fact that all of that money that you have saved for months is still safe and sound for that big purchase you are saving for.  No, honey, I have not always waited and here is how I paid dearly for it …

Great conversations can be had when you just say "wait", "not now", and "later". 

Here are the lessons I think are being learned or reinforced:

• Waiting is essential to excellent decision-making.
• Open lines of communication are critical.  Instead of just saying "No!", we provide the opportunity to talk about why the decision has been made to wait.
• Her parents are practicing what they are preaching.  By showing our daughter that we are also "waiting" on some purchase decisions, we are demonstrating that we are living this out.  Now THAT will preach!

Read the entire series 

Part One – Twenty Dollars

Part Two – Give, Save, Spend

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Ever since Jenn and I had our I Have Had Enough Moment with living paycheck-to-paycheck and B-R-O-K-E and living the three-time-loser-with-credit-cards life, we have made it a huge priority to teach our daughter about money management.  It became a HUGE priority when we realized that she has inherited my "spender" genes!

In this series, I will be sharing some practical ways that we are teaching her about sound money management.

Part Two – Give, Save, Spend

Jenn and I purchased Dave Ramsey's Financial Peace Jr. kit back in 2004, and it has been a mainstay on our refrigerator ever since.  I really like the three main categories that he focuses on in the kit – GIVE, SAVE, SPEND.

Every time that Melea receives money, we have taught her to divide the money into the three categories.  She has to put twenty-percent into the GIVE envelope, at least twenty-percent into the SAVE envelope, and the rest goes into the SPEND envelope.

Since this has been the standard procedure since she was very young, it is part of her DNA to think this way now every time that she receives money.  She KNOWS that it must be divided between the three categories.  You want to feel proud?  Watch your child automatically take birthday money and separate it into the three categories and see that the GIVE and SAVE categories exceed the SPEND category.

Thanks, Dave Ramsey, for offering such a simple, yet fantastic product! 

Here are the lessons I think are being learned or reinforced:

• GIVE and SAVE take priority over SPEND.  So basic.  So subtle.  But this is HUGE when it comes to ensuring that our plans/hopes/dreams are fulfilled.
• Giving fills the heart.  Saving fills the bank account.  We talk through the giving decisions. She knows exactly what she is saving for.

Read the entire series 

Part One – Twenty Dollars

Receive each post automatically in your E-MAIL by clicking HERE.

Ever since Jenn and I had our I Have Had Enough Moment with living paycheck-to-paycheck and B-R-O-K-E and living the three-time-loser-with-credit-cards life, we have made it a huge priority to teach our daughter about money management.  It became a HUGE priority when we realized that she has inherited my "spender" genes!

In this series, I will be sharing some practical ways that we are teaching her about sound money management.

Part One – Twenty Dollars

We recently embarked on the largest and longest vacation of our lives.  We traveled from South Carolina all of the way to far western South Dakota via car.  The trip consisted of a week at a fishing cabin in northern Minnesota and a week hitting all of the tourist destinations of South Dakota.

As with any type of vacation, we knew that we would be encountering the tourist traps just waiting to take money from our pockets and put it into their pockets.  This has been a source of frustration in the past because our daughter would see something she just had to have and begin a full-tilt marketing campaign to obtain it.  It starts with asking mom.  When referred by her mother to speak to dad, she spins the statement by saying, "Mom said I can get it if you say it is OK."  This spin is done to make me clearly understand that I am the bad guy if I say NO and that I am the only barrier to achieving the acquisition of said trinket/junk/trash/souvenir. 

Well, I came up with the PERFECT solution for the problem.  Jenn and I gave our daughter twenty dollars at the start of the vacation with the following rules.

1. When it is gone, there will be no more.
2. You can spend it however you want.
3. We will not question your purchase, but we will answer any questions you have.
4. You can save the money if you want.

The result?  Stress-free walks through the tourist traps.  On several occasions, I even saw her pick up an item to purchase it and then put it back down.  One time she had picked up the bag to fill up with painted rocks (painted rocks! what an idea!) and she put it down, announcing, "They are really pretty, but they would just sit around at home."

Did she save any money to bring home?  Nope.  She is a spender through and through, BUT she followed the rules and it prevented a lot of frustration. 

Here are the lessons I think are being learned or reinforced:

• Money is limited.  If you spend it all now, there will be nothing left in the future.
• Cash limits impulsive spending.  For spending categories that are susceptible to impulsive purchases, it is very helpful to plan ahead and take cash.  You can not overspend cash.
• Opportunity cost.  If you buy a particular item, what was the next best thing that money could have purchased.
• She is a spender.  It is very helpful to recognize your own spending behavior.  My wife is a super-duper-saver.  She saves money.  She hates to spend money.  I am a HUGE spender.  Check that.  I am a reformed-spender.

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