Childhood Piggy Bank

I am a recent college graduate and it wasn’t until midway through college that I seriously began looking into savings, investing, and trying to make my money grow. Why did I wait so long? We all know the power of compounding, and the longer you have your money in interest bearing accounts the more money you will earn.

Well, disappointed in my own actions, I have wondered how I would raise my children so they would have a better understanding of money. I think the first concept to get across is the benefit of saving money. Make saving money fun! We all know how much fun those funnels are at the mall that you drop your coins in and watch it race around in circles, so why not buy a smaller version for your child’s room. I personally wanted one of those automatic coin sorters as a kid, because I thought they were the coolest things on earth. Another tip, which I was often deprived of, is to give your children an allowance. As soon as your child is able to do simple math with money then they should begin receiving an allowance. By doing so, you are giving them responsibility for their own money, thus showing your child you acknowledge that they are ready for adult stuff. Once you do this, you can teach them the basics of saving and spending. If little Johnny doesn’t have enough to buy that new action figure, then he will have to wait until he saves up more. If only this concept stuck with adults, many wouldn’t be in credit card debt today.

D o you have children? What tricks have worked, or not, for you? What suggestions do you have for teaching kids the basics of money, and providing them with a foundation to be financially confident?