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We started pretty early with my daughter. She gets an allowance and immediately has to put half away--paying herself first. Then she can earn additional money by emptying the dishwasher, etc. She has turned out to be a pretty good saver so far.
My wife and I have made it our goal that she will not graduate high school without having a fundamental understanding of the basics of how credit cards work, how compounding works, etc. This isn't taught in schools and I never learned it from my parents--but she will!
I did a simple spread sheet and showed her how compounding works on a Roth. I showed her how if she started with $20K at her age now and did nothing until she retired she would have some $x million by age 65. But then I said, what if you at age 21 decided you wanted to take out $10k for a new car---so we did on the spreadsheet and went to the end of the spread sheet. Her comment "wow--I just lost a million dollars!"
Great insight sweetie! I was very proud of her. I really think that exercise illustrated for her that simple decisions can have great impacts down the road.
So we plan on teaching her all about money. I only wish I had the education myself when I was her age. Good luck to the rest of you parents out there!
My wife and I have made it our goal that she will not graduate high school without having a fundamental understanding of the basics of how credit cards work, how compounding works, etc. This isn't taught in schools and I never learned it from my parents--but she will!
I did a simple spread sheet and showed her how compounding works on a Roth. I showed her how if she started with $20K at her age now and did nothing until she retired she would have some $x million by age 65. But then I said, what if you at age 21 decided you wanted to take out $10k for a new car---so we did on the spreadsheet and went to the end of the spread sheet. Her comment "wow--I just lost a million dollars!"
Great insight sweetie! I was very proud of her. I really think that exercise illustrated for her that simple decisions can have great impacts down the road.So we plan on teaching her all about money. I only wish I had the education myself when I was her age. Good luck to the rest of you parents out there!
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