Financial education
Last week I was shocked to learn that most of us have developed our money story by age 7. This means that by the time your 7, your life-long view of money is formed. No wonder it takes hard work to rewrite your money story. It did for me! In last week’s post on allowance, I mentioned my daughter’s allowance was “rule of thirds.” This is one-third for spending, one-third for saving and one-third for charity.
Here are some other money concepts I taught my daughter (post age 7):
1. At around age 12/13, I introduced her to my financial advisor and made her feel comfortable that she could reach out to him with her money questions. (if you don’t have a financial advisor, your child can come to you or a trusted family member or friend who is good with money).
2. At age 14 (9th Grade) I put her on o a clothing budget twice a year for all of HS. She had to calculate what she would spend on her needs and wants and make sure it was in the amount I gave her. When My parents did this with me, I had to estimate the amount of each item and then total it. After shopping I went back and filled in the exact amounts. Now that shopping is online, the actual price can be obtained at the beginning.
3. I gifted her 3 shares of Apple stock for her 17th birthday, so she could learn about the stock market. I picked a company she liked and told her she couldn’t sell the shares until she finished college. She has the Apple ticker on her computer home screen so she can see what it is doing each day.
4. She was gifted a US Savings Bond at her birth. When it was finally cashed in (she was 19), I used it as an opportunity to discuss how bonds work.
It is important that we teach our kids about money, budgeting, and financial planning. “Teaching kids about money early on will help them to become more financially independent as they get older. Financial education has been linked to lower debt levels, higher savings, and higher credit scores as children mature into adulthood. Later on in life, that financial education is also positively connected to net worth and investing.” — FDIC According to Debt.org, the average American adult age 18-29 has over $12,ooo in debt and 30-49 has over $26,500. Not to mention the number of young adults with student loan debt. “American household debt hit a record $16.9 trillion at the end of 2022, up $2.75 trillion since 2019, according to the Federal Reserve.” —Debt.org
With all this debt, it makes teaching our kids about money and financial planning a must. I have to say I am proud of how my daughter, living off campus, manages her money to be able to go out with friends, grocery shop, buy necessities, etc. all within her monthly allowance.
Books for your kids (and you to read):