Raising financially astute children.

[Kings over Queens]

I've heard that people are uncomfortable talking about money, or household finances, with their kids, like it's some taboo or something. Schools aren't teaching it. It's up to us, as parents, to do this.

 

Kids need to understand how to earn money, how to spend money, how to save and invest it, what debt and paying interest is about...all these things. It makes no difference how much money you've got or don't have. We've all got income in one way shape or form, and we've all got bills. It's a good idea to share this with your kids, to educate them.

 

My wife and I gathered ours this past Sunday afternoon at the kitchen table, and let them participate in paying the monthly bills. Normally I do this in the office, but we thought it would be interesting to let them be involved. To make it a little more realistic, I cashed my checks first, so that they could count out the cable bill, and electric bill, and mortgage, in cash. It was an eye opener for them, and immediatly help them understand how much things cost, and why they can't always get the things they ask for.

 

I explained how a mortgage works, and how part of the payment goes to the bank (interest) and how part pays down the principal. Finally, they each got to write out a check for one of the bills that had to be paid.

 

It was a very interesting learning experience that seems to have made a big impression on them.

 

Talk to your kids, especially the ones who are nearing college. The credit card companies are ready to pounce on them.

[Billybob]

Instructokoq

 

That's why I was interested in how dinoboy picked his college choices. Some kids think the rents are an endless stream of cash.

The sooner they learn, the better.

[HugeDinghy]

NEFE or NFTE

 

if you are interested, these are the most widely used curriculums for teenagers. One is strictly financial lit and the other covers it via entrepreneurship

[Brother Brian]

Number one read should be a book titled "Rich Dad, Poor Dad". The basic premise is that most people don't tell children anything about money because they themselves don't know anything about money. The bottom line is to acquire assets and avoid liabilities and to work for information and experience and less for money. Truly stated. If I had it to do over again, I wouldn't go anywhere NEAR a college (except to parties to try and jump bones). Instead, I'd learn about building, electrical systems, small engine repair and other occupations that would help me to buy and service cash businesses (car washes, laundromats, parking lots, etc). That money, I'd use to acquire assets (rental properties, other businesses etc). It took me a while to figure out that although information is nice (I have a degree in environmental science) I am a "Whoever dies with the most days off is the winner" kind of guy. With the above scenario you could achieve that lifestyle and balance assets to liabilities, something that VERY few people do.

[surfcollector]

Great thing to bring up. A lot of kids take it for granted. Being an adult now, I wonder how the hell my folks were able to afford this and that and do nice things for us. This is the one area that you have to keep learning about or else you're screwed.

[Eagle Claw]

I've heard that people are uncomfortable talking about money, or household finances, with their kids, like it's some taboo or something. Schools aren't teaching it. It's up to us, as parents, to do this.

 

Kids need to understand how to earn money, how to spend money, how to save and invest it, what debt and paying interest is about...all these things. It makes no difference how much money you've got or don't have. We've all got income in one way shape or form, and we've all got bills. It's a good idea to share this with your kids, to educate them.

 

My wife and I gathered ours this past Sunday afternoon at the kitchen table, and let them participate in paying the monthly bills. Normally I do this in the office, but we thought it would be interesting to let them be involved. To make it a little more realistic, I cashed my checks first, so that they could count out the cable bill, and electric bill, and mortgage, in cash. It was an eye opener for them, and immediatly help them understand how much things cost, and why they can't always get the things they ask for.

 

I explained how a mortgage works, and how part of the payment goes to the bank (interest) and how part pays down the principal. Finally, they each got to write out a check for one of the bills that had to be paid.

 

It was a very interesting learning experience that seems to have made a big impression on them.

 

Talk to your kids, especially the ones who are nearing college. The credit card companies are ready to pounce on them.

 

 

KoQ

 

I totally agree with you. I still take college courses when I have time. It's apalling and tragic the amount of credit card debt students have, even under 20. They may joke about it but they are throwing away their most valuable wealth accumulating asset; time. Accumulating and then paying off that early debt will have a dramatic effect on their net worth and later lifestyle and retirement.

 

Teaching children about money is not only smart policy for them it's also good for the country.

 

 

Don't forget to show them how interest grows principal, that usually really gets their attention.

 

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EC

[Governor]

good idea my parents taught me this stuff and it served me mostly well. kids wouldn't be kids though if they didn't learn things on their own the hard way.

 

you have to be careful of your kid strolling through the quad one afternoon in a 12 beer haze and seeing discover card offering a free frisbee for signing up. ask me how i know

[sageguy]

My goal is to make enough that they don't have to worry about it.

 

Least I can do, I'm really a horrible parent........I just let them watch spongebob and eat candy.

 

Thanks for tips, now I now what I should be doing.

[BranfordJeff]

Einstein said the most powerful force in th universe s compounding interest, and it can work for you or against you. My 12 year olds LOVE earning a couple hundred bucks a month interest on their savings. It's all money they earned working around the neighborhood.

 

My oldest kid knows the reverse, she, without ever discussing it withme, went and got a couple credit cards when she had no job, and can't pay them off. Had her car repo'ed, etc. Great lesson to her younger sisters. . The oldest is just like her mom, btw. UGH, I don't miss the $2,000 a month in credit card payments witht hat witch!

[sageguy]

Einstein said the most powerful force in th universe s compounding interest, and it can work for you or against you. My 12 year olds LOVE earning a couple hundred bucks a month interest on their savings. It's all money they earned working around the neighborhood.

 

My oldest kid knows the reverse, she, without ever discussing it withme, went and got a couple credit cards when she had no job, and can't pay them off. Had her car repo'ed, etc. Great lesson to her younger sisters. . The oldest is just like her mom, btw. UGH, I don't miss the $2,000 a month in credit card payments witht hat witch!

 

$2000 a MONTH?????? Holy Snikeees.

[hooktup]

[Loon]

KOQ, agree with your premise. The concept I've tried the hardest to I've tried (and keep trying) to impart to my kids (who've long since left the nest) is to "pay yourself first". Specifically, make a savings amount..which can be small when you're young, but has so long to compound...the first line item in your budget, then prioritize the balance to determine things like housing, toys, partying, etc. Of course this runs counter to the usual strategy of save something if you have some bucks left over after the usual expenses.