By Kendra Johnson*
Picture this: you're at the store with your little one, and they eagerly ask if they can buy that shiny toy they've been eyeing for weeks. As a parent, you're faced with a precious teaching moment – a chance to instill the value of money and the importance of making thoughtful choices. It's moments like these that make us realize just how essential it is to teach our kids about money from an early age.
Step 1: Get Them a Give-Save-Spend Bank
Laying the Groundwork for Financial Confidence: It all begins with a humble piggy bank and a handful of coins. I remember the excitement in my child's eyes as they proudly dropped each coin into their enduring legacy piggy bank, setting the stage for a journey into the world of finances. It is my belief that this simple act will lay the groundwork for their financial confidence in the years to come.
Step 2: Learn Through Play!
Learning Through Play: Making Financial Education Fun: The secret to making financial education a delight? Learning through play! We've turned budgeting into a game, transformed shopping into a treasure hunt for the best deals, and often play pretend ice cream shop with our toy ice cream cards. The laughter and learning that fill our home during these activities are priceless.
Step 3: Turn Screen Time into Learning Time
Watching the Small Legacies Financial Education Shows: One of the best parts of my job is not only creating the Small Legacies YouTube Channel but getting my kids involved in the videos! It's so much fun to learn and teach with them right by my side.
Step 4: Help them Earn Money Around the House to Spend
From Piggy Banks to Smart Spending: The joy of watching my boys carefully count their allowance or "commission", plan their purchases, and ultimately make a decision brings a sense of accomplishment like no other. Teaching them to budget their money and make choices based on their priorities isn't just about the dollars and cents – it's about nurturing a skill that will serve them well throughout their lives.
Here's where things are easier said than done. My kids struggle to limit their spending. They would spend every cent on Pokémon cards if they could. We are continually having conversations about the fact that their money is finite.
Step 5: Talk about Debt
A Shield Against the Debt Dragon: Ah, the talk about debt. It might seem like a heavy subject for a young mind, but as a parent, I've come to realize the importance of introducing this topic early on. We've had candid conversations about the pitfalls of debt, drawing from real-life examples. It's heartwarming to witness the spark of understanding in their eyes as they grasp the significance of responsible financial management.
Just the other day when I said something wasn't in the budget my son Shane said "you can just use one of those cards where you spend other people's money." haha. That was definitely a good organic opportunity for me to say why that can be dangerous.
I have been in debt many times in my life. $40,000 in student loans, a $25,000 car loan, and a HELOC. I've been there and I hated it every time. I understand the panic and dread associated with being in debt and I am actively working to avoid it every day.
If you need help getting out of debt I highly recommend reading Dave Ramsey's Total Money Makeover. It changed my life in amazing ways (even if he is a grumpy old man, haha)
Step 6: Let them Be the Boss of Their Money
Empowering Young Decision-Makers: Do my kids really need yet another set of Pokémon cards? No. But I bite my tongue. It's their money and their choice.
The proudest moments come when I see my kids take the reins of their financial choices. As we've delved into discussions about saving, investing, and making informed decisions, I've watched my boys blossom into a confident and independent young decision-makers. It's a lesson that extends far beyond money – it's about nurturing a sense of responsibility and autonomy.
Step 7: Talk About Future Goals (Like Saving for a Car or College)
Planting Seeds for a Prosperous Future: Setting financial goals might seem like a grown-up concept, but it's incredible to witness the enthusiasm with which my toddlers embrace it. From saving up for that coveted video game to discussing the importance of a college fund, these conversations plant seeds of financial wisdom that will bear fruit in their prosperous future.
I remember vividly the moment my mom shared with me that she wasn't able to pay for my college. She asked my I'd I wanted to go to Grad School one day (my sister had just begun).
I relied "It depends if you are willing to pay for it!"
She quickly explained that she was not going to be able to finance any of the college education, let alone a master degree. As a single mom raising four girls, it just wasn't possible. It was a shock to me because I had assumed she would. But this moment was one of the most valuable memories I have. It was a moment of honesty and care. It was a moment when she was helping guide the conversations about what my future would look like, AND how I was going to pay for those dreams to come true. This simple 5 minute exchange is a core memory of mine that has guided my decision making ever since.
Step 8: Share the Struggles Together
Overcoming Together - Challenges and Triumphs: Explaining complex financial concepts isn't always a walk in the park, but the journey is one we've embraced together. We've encountered challenges, navigated confusion, and celebrated triumphs. Each hurdle overcome is a reminder of the power of patience and teamwork. And of course, there are MANY toddler tantrums in the toy aisle along the way.
I've found it's ok to talk about the challenges of sticking to the budget. A friend of mine wisely shared with me a time when her son began to grow anxious that they didn't have a enough money because she was always talking about the budget. In order to avoid excess stress or anxiety, keep things light. Try framing financial troubles as an exciting problem to solve (I know, this is hard to do, but I find it helps my personal mindset as well).
Our Contribution to a Financially Savvy Generation:
As a parent, I believe I play a vital role in shaping the future stability of my children's lives. By teaching them about money, we contribute to a financially savvy generation that's equipped to make informed decisions, avoid debt traps, and stride confidently toward their dreams. It's a collective effort that ripples through society, paving the way for a brighter financial future for all.
Conclusion: In this fast-paced world, it's easy to overlook the significance of teaching our kids about money. Yet, as a parent, I have the power to empower my kids with essential life skills that will guide them through every financial milestone. Will they take these lessons to heart in the long run? Maybe not. But as they grow into independent adults who make their own financial decisions, at least I know they have had a good practice run of managing their money at home.
And so, my husband and I keep on nurturing future financial wizards who are ready to take on the world – one dollar at a time.