Teaching children about saving/investing

**theoracle** · 08-28-2014, 01:13 AM

We started paying our eldest an allowance of $5/week when he turned 6. He can spend it how he chooses and tends to save it up so that he can buy games for his xbox or apps for his ipad. He only really began to understand the concept of money and saving after 7yrs old and began offering to do chores around the house for money when he was saving for higher value items.

**dczech09** · 08-28-2014, 04:02 AM

I recommend paying your son a commission, as opposed to allowance. That is what my dad does with my little brother, and what I plan on doing when I have kids. Give them $X for completely a certain task. For example, $10 for mowing the lawn.

Of course, they should have regular responsibilities that are unpaid- such as cleaning after dinner, picking up the living room, and keeping their bedroom clean. However, other tasks have a $ amount associated with them.

When I was growing up, my dad would do that. Then at the end of the week when we totaled our commissions, my dad would help us separate the money into three stacks: spending, saving, and taxes. Spending was for us, saving went into our bank accounts, and the taxes went towards household goods and items. Taught myself and my sisters that money is EARNED through work, saving is important, and taxes will be around!

I also did odd jobs such as sell things door-to-door, and during 4th of July parades, I would cart around a wagon with coolers of water and soda which I sold to people sitting and waiting for the parade.

Another cool thing is implement a matching program. If you son saves $20 towards some future expense, you chip in $20 as a match. You may want to impose a limit as to how much you match him, but that is definitely a good incentive!

The key is that you want your son to develop good money habits. Some of the best habits he could establish are work and save.

**frugalredhead** · 08-28-2014, 08:22 AM

We started giving my oldest $3 a week when he was around 5. He has 3 chores his has to do - clean his room, clean the playroom, and put his laundry away. During the summer we added $1 for him to water the veggie garden. If he doesn't do the chores, he doesn't get the money. We don't give it to him just because, he has to earn it.

I have found that he is always eager to spend it, even if it's on some little cheap toy that I know he'll only play with for 5 minutes. I tell him that it's his money and he can spend it on whatever he wants, but to think really hard about it, because if he saves it instead, he can buy something really cool that he wants. He almost always changes his mind and decides not to buy whatever piece of crap he had picked out. He is a very smart, logical child, so if he decides to get something he has real reasons for wanting it that usually make a lot of sense!

**juvy** · 08-28-2014, 03:03 PM

its really nice to teach kids at a young age. they will apply them while growing up

**cashinasnap** · 08-29-2014, 06:56 PM

Well imparting correct education about value of money & its usage, will be an eye opening experience for the kid, where they will start taking interest about safe handling of money. They will further spread the idea to their fellow mates about ways to save for future & investing it. Though giving allowances can be good way to keep an eye on kids. whereby to check how much they spend & save out of it.

**Augustine** · 08-30-2014, 11:37 AM

What you do will carry more weight than what you say, and they will model your behaviour. You therefore have to be sure to practice what you preach.

They also need to see the link between work (effort) and money to safeguard them from the entitlement mentality that can cripple them financially later in life.

Teaching them how to earn money at an early age can help them understand that money is earned by exchanging value as opposed to an entitlement simply because they are your offspring.

**wenice** · 09-13-2014, 01:10 PM

It is really important that we teach our kids to value money and to value the effort of earning it. When they learn on their early years how save and invest, they will bring it to adulthood and they can use it to secure their finances and to make their future greater.

**YolandoAmaya** · 10-09-2014, 11:27 PM

You are doing a good job as a person and as a parent. In today's high profile generation, it is very important to share our funding, saving and investments knowledge with our children. They need to know how to save and invest their money.

**krantcents** · 10-10-2014, 03:41 PM

When I was a child I never received an allowance. I worked for my parents stating at 5 years old. When I went away to school for the 7th grade, I received a very small allowance and learned how to save to get what I wanted.

I wanted my children to learn about money differently and gave them an allowance based on chores. They were required to save half of their allowance. My children are adults now and they learned great financial skills. Of course, I exposed them to many other skils too.

**Zedon** · 10-11-2014, 09:26 PM

My dad made me save half of everything I got from as early as I can remember. It became second nature and became my habit. My allowances started out tiny like 1 dollar a week and I think topped out at $5. When I got old enough I used a big chunk of it to buy my own car. Of course when you are an adult with bills you can't save half of what you make but the urge to save is still there. I think at one point around 30 I was only putting about 10-15% of my salary towards retirement/savings but now at 40 in one form or another nearly 50% of my salary will go towards retirement or savings.

**Caponi** · 10-12-2014, 06:20 AM

Where I'm from none of this is popular and it's a shame.
Damn, if only someone would teach this to me when I was a child, I would have avoided many problems along the way :P

Great parenting.

PS. I especially loved what "dczech09" said, I am going to do the same when I have kids.

Teaching children about saving/investing