I was reading Educating Your Children about Money and it had an interesting timeline to follow where it show different ages at which children can process different monetary concepts. To me, this is a great idea to get them involved as early as possible since I did not really have that kind of education as I was growing up.
One of the things that I have tried to do over the years is to give each of my children an allowance that amounts to how many years that they have been alive. This echoes the idea of getting a salary instead of paying for chores. I find that paying for chores doesn’t really work for us, because not only can they opt not to do the chores (which is not conducive to family harmony!), but the book work can be harder to manage. The way I’m currently doing it, they get paid when I get paid.
I’ve also taken to making sure to teach them different kinds of money usage/savings. They save to help go to camp, they have long term savings, and they give to charity. I’ve also taken to showing the older ones about investments. We’ve picked up a silver coin and instructed them in the 3 different values placed on a physical asset:
- Face value – What the coin says that it is worth.
- Intrinsic value – What the coin’s contents are worth.
- Collector value – What the coin’s perceived worth is based on what someone would be willing to pay for it.
I’ve also invested in some stock that the children would be interested in as a point of trying to get them to understand investing.
The point is that many adults find themselves managing a lot of money over their lifetime, though many don’t have the type of training that may have had in swimming or in learning a musical instrument! Many adults just handle it all and then wonder why their children have such difficulties.
What methods are you using to train your children? What did your parents teach you?