All In The Family - Teaching Children About Money

As a parent, you want to give your children the life lessons, values, and experiences you feel are important. Perhaps you received them as a child and recognize their importance, or wish you had when you were young. Whether it's teaching your offspring how to treat others, how to throw a perfect spiral, or bake your famous chocolate chip oatmeal cookies, one of the joys of parenting is seeing your children embrace something special to you. When it comes to money, though, people can get really weird. Your financial well-being is very personal, of course, but isn't it important for your children to understand how money works? Most educational paths avoid conversations about finances; yet, much of what happens in our lives and in our society is driven by the almighty dollar. To close out my series on children and finances, I want to discuss the considerations when talking to your offspring about money.

Her mom said to get the fresh sliced pineapple, but she's locked in on those Doritos...

What Did You Learn In School Today?

The anatomy of a frog. How to draw a three-dimensional picture. The elements of the periodic table. Children learn about a wide variety of topics in the course of a school day. History, language, art, music, gym, math, and science are all important aspects of a young person's development and learning. Do you remember the last time you were asked to climb a rope at work? Play a recorder to impress a potential client? Or, as a question in a job interview, identify the element of the periodic table with the symbol W? It's tungsten, in case you find yourself in that position. Yes, all these activities should have a place in schools. But shouldn't finance be at least a small part of the overall educational approach?

This is where I will shamelessly plug my favorite non-profit, Junior Achievement. Junior Achievement's purpose is to "... inspire and prepare young people to succeed in a global economy." JA builds lesson plans for grades K-12 than can be taught in a full-day or multi-session format. Volunteers from the community (business people, retirees, etc.) teach the material to students, with several real-life scenarios and activities that teach important age-appropriate financial lessons. I have served as a volunteer in the classroom, recurring donor, and member of the local Junior Achievement Board of Directors. In each capacity, I have been truly inspired by this terrific organization's ambition to provide children a quality financial literacy/workplace readiness base for their future development. In today's COVID climate, they made a seamless transition to 100% virtual instruction. I encourage you to look into opportunities to get involved in your local JA. And, if you're an international reader and think you get a pass, JA is global!

I Wish I Knew That!

Think back to your childhood. Most likely, you were blissfully naive about how money worked. When you were, say, 5 years old, you had a piggy bank. You probably thought you were rich because you had $1.87 in random pocket change! Once you reached double digits, you may have received allowance and purchased something at a store. Perhaps you even got some sticker shock when your "life savings" wouldn't get you the bike you wanted. As a teenager, you may have had a job and gotten a real paycheck! All of these experiences are part of your financial upbringing, but we know this isn't a complete picture of what being a financially-responsible adult requires.

I'm not proposing you share your full financial details with your 8-year-old. What I am suggesting is explaining to your teenager who's convinced she can afford a mansion in Bel Air by working part-time at an organic juice bar. Knowing your children, feeding them these tidbits over time will help them digest how money works in the real world. It's not about crushing their dreams of owning a monster truck - it's about educating them about the cost of tire replacements and the impact of its poor fuel economy on your overall car expense, then helping them figure out how to earn the money to make this amazingly impractical dream come true.

Entrepreneurial Spirit

The classic childhood hustles are perhaps the best business lessons you can give your kiddos. Lemonade stands, babysitting, lawn mowing... all great ventures for the little neighborhood entrepreneur. Depending on age and maturity, your children may be able to do it all themselves. However, should you let them figure things out on their own, or go full helicopter parent and hover over their business dealings? Of course, you need to ensure what your children do is safe. But do you squeeze those lemons for them? Build the stand and collect the money? I say no, but how about helping them figuring out the costs of the lemons, sugar, water, and cups? You can even help them do the actual math. Set market-competitive pricing? Beth and Gabe across the street did $0.50/cup last weekend, but used powdered mix! Can you justify $1 for your fresh-squeezed deliciousness? These seemingly minor details are the hidden lessons of youthful capitalism. So, when your child wants to open up that lemonade stand, don't just buy them some Country Time and plop them on the sidewalk for an afternoon. Help them determine the components of a proper business. And, after they close up shop, ask them about what they learned. Children can be incredibly observant, and you may be surprised what they pick up.

I'll never forget my dad encouraging my brother and I to start our little businesses at a young age. While the Polk St. Journal didn't last more than two weeks and was heavily plagiarizing our much-larger competition, and my asphalt resurfacing company shuttered its doors after one grueling summer in high school, the lessons we learned undoubtedly contributed to our career successes. And even if your hard labor restoring driveways got you nothing but bad sunburn and tar-stained Reeboks, perhaps you figure out you're best-suited for an office job! Not every experience needs to be end in success. As Michael Scott said as "Date Mike", you learn more from the losers. Soak up the lessons and you'll know the better path forward!

As this series on kids and money comes to an end, I do want to share some exciting news. One of my loyal readers reached out with some blog ideas. Instead of just taking his ideas as mine, I asked if he would be willing to write a guest blog, and he said his fee is $10,000. We negotiated, and he's now doing a blog for my Teenie Beanies collection. Inspired by this terrific young man (and horrible negotiator), I am now inviting all of my amazing readers the opportunity to become part of the Dough-Nuts empire! If you have an idea for a blog - or better yet - want to write one yourself, feel free to reach out to me in the Ask Me! section of the home page and let me know how to get involved. Don't worry - I have plenty of fresh ideas of my own, but I truly want your perspectives and insights to help us all make better personal finance and career decisions. Have a wonderful week!