5 Activities to Help Teach Money Skills to Children

It’s never too early to start teaching your children the value of a dollar. I love this topic because we have so many opportunities every day to teach our children about money in age-appropriate ways.

Shopping is a golden opportunity to talk to your children about money. When your child shows you something that they would like to buy, your first response should be, “How much is it?” This helps them become conscious that there’s a price associated with any purchase. Another teaching opportunity when shopping is to take them to the clearance rack. Show them an item that’s on sale & help them calculate exactly how much that item would cost based on the percent off. This teaches them that you can buy things at reduced prices.

Take your children to a bank and help them in Setting up a Savings Account at the age they start receiving money either as gifts or because they’re working (even if it’s just babysitting or odd jobs). This will teach them that out of any money they earn, they should put a certain percent away in a savings account, put some away for a future purchase and spend some for immediate gratification.

Another great thing to teach a child is about Setting Goals and Saving for Them. Have your child identify something that they really want, like an iPod or Xbox. Every time they receive money, encourage them to put a little into their long-term savings account, spend a little & save the majority for this larger purchase. This will instill in them the skill of saving up money in advance for the things they really want.

Lastly, take time to teach your children the good & the bad of Using Credit Cards. The next time you use a credit card to buy gas or groceries, explain to them that this card compiles all of your purchases & generates a bill for the total that you have to pay once a month. Show them the bill at the end of the month & remind them of the various places that they saw you use it. Or, login to your account when you get home & show them the pending charges on your card. When you go to pay the bill in full, explain to them that you were able to use the card appropriately by consolidating purchases. Even if you’re unable to pay the bill in full, take the next step in explaining to them how interest is charged & accrues on a credit card. Relate it back to what you showed them at the clearance rack by buying something at a certain percent off by explaining that if you don’t have the ability to pay the credit card bill in full it’s as if you’re willing to pay a certain percent (equivalent to your interest rate) more for the items. This is the way that we can teach our children not to make the same mistakes that so many Americans have made living in the age of credit cards.

If you’re really going to make the effort to teach your children about money, there are a plethora of online resources available to help your children learn by Playing Money Games.

I hope this gives you a few ideas of ways you can teach your children about money. Remember virtually every day of your life is an opportunity, so the most important thing is to talk about money. Communicate with your child & I think we’ll be able to raise a generation of financially healthier children.


Why Save When Life is Short?

“What if I die tomorrow?”

I’ve often heard people use this as a justification for not saving money. I’ve never personally thought this way about saving, and in fact my thinking is typically quite the contrary. I’m far more fearful of living a long life and running out of money. However, I’m experiencing more and more death in my life as I age, so I catch myself having similar thoughts around saving,. Granted, most of the deaths I’m experiencing  are in my parents’ generation, but in the past month, I’ve also had several experiences of unexpected, premature death.

A terrible car accident behind my neighborhood left a 20-year-old driver dead, while one of my son’s childhood friends in the passenger seat survived. One of my long term-clients, 52 years old, was diagnosed with lung cancer 3 years ago, but recently received the news that it’s spread to other parts of her body. The father of one my son’s classmates, diagnosed with pancreatic cancer, in addition to the random shootings that have dominated the news lately. Of course you all have your own horror stories to share of people who die or will die WAY before their time should be up.

Events like these tend to shake the foundation of my belief system and professional focus of saving for the future. Given longer life expectancies, baby boomers’ earlier retirement goals, and lackluster returns of the stock market during the last decade, our long-term savings are more important now than ever. When I feel the shock of an early death or terminal diagnosis, my initial reaction is, “Why am I saving for the future?” And for that matter, “Why am I still working?”

Then my logic returns and I start thinking rationally. The reality is most people in America die of Old Age. It’s the small percentage of people that die prematurely that allows us to ask ourselves, “Why should I save?” If I were to stop saving for the future and start spending all of my earnings, would I have a more meaningful life experience? I think that this is generally not the case. We falsely tell ourselves that if we had a fancier house, car, TV, etc., that we’d be happier. When, in fact, recent studies have shown that experiences which build memories contribute far more to our happiness than stuff!

So, it all comes back to the balancing act of saving for the future, while spending time building relationships that will impact our current happiness. A new TV might give you a brief spell of excitement, but only until your neighbors get an even bigger one (or until you have to pay the credit card bill for the purchase)!

As usual, money issues simply aren’t rational. There is a huge emotional component as well.