Us parents are full-time teachers, providing guidance for everything, from how to tie a shoe to how to cook a proper KD lunch (nostalgia, am I right?). There’s nothing more difficult, yet rewarding, than figuring out how to properly prepare our kids for the future. Teaching them how to save is a HUGE part of this because, after all, the habits that we instill early on will be the ones that they carry with them the rest of their lives. With back to school and the beginning of fall, I’m sharing some of the practices that I have adopted over the years with Avrie and Nate, and I’m happy to say that the kids have a great mindset around money.
- Engage in conversation around the importance of saving
With this, it’s very important that you tailor the conversation to their age, engagement level and general interest in money and saving. If it’s not something that is resonating with them, I find that it always helps to draw connections back to their interests and what they’re passionate about. If they love dinosaurs, explain how the return on investments in the future can yield more Triceratops (without the jargon, of course)! If something is talked about positively in their day-to-day life, children can gain the necessary knowledge without feeling any kind of pressure. We want it to feel like anything else we’re teaching our kids. Don’t forget, there’s a reason kids are so great at picking up languages, activities, and concepts at an early age – they learn quickly.
- Start saving something
Show your children that saving a percentage of their money allows them to have funds available for a rainy day, or for a prized possession that they really want to invest in. For example, think about when you were a kid and you’d put your tooth fairy money in a piggy bank to save for later. It was always an amazing feeling opening the piggy bank 4, 8 or 12 months down the line to find that your bills and coins had increased over time! Regular contributions every time they get an allowance, when they babysit, monetary gifts from family and tooth fairy rewards can be added to “the bank” until you decide that it’s time to reap the benefits.
- Show them the growth over time
My kids love learning about compound interest. I already talked about it above, but it looks like magic when their bank account grows, and they acquire more funds as time goes on. I think it’s extremely valuable to make time to show them the results and to celebrate the growth. Investing requires patience, and while we want to make it seem in reach for our children, it’s hard work. Let’s employ the same rules for our children as we do for ourselves – once they have invested X amount of dollars, celebrate that achievement with something else that they love. If it’s an ice cream cone, let them pay with their own money. They will feel so accomplished!
- Make it fun
Figuring out how to make investing fun isn’t as hard as it may seem. Going back to the idea that saving should be a regular part of their everyday life (even if it’s just a discussion), sharing your own financial wins and goals can be hugely beneficial. After all, your kids look up to you – lead by example! Getting excited about a new promotion at work or showing them how you spend and save can make a huge impact on how they view finances.
I also recommend including your kids in your family decisions like where to spend a Saturday or where to get takeout from. These seemingly small choices and habits help to give your children a sense of independence, which will do wonders for their financial confidence. When appropriate, it helps to share the cost of objects or experiences with kids, so they can understand the value of money and learn to appreciate what things cost.
As you know, I so often talk about financial confidence, the value of investing, the money mindset and balance, and this is exactly what I try to inspire in my kids. I hope that these ideas have helped you if you’re navigating these kinds of conversations with your own children, and of course, shift and adjust these points as needed to suit your lifestyle and values. These are just some of the many things that I have learned in my years of parenting! It’s a journey, and we’re all in it together. 💜
