Raising money wise kids has always been of remarkable importance to me. Primarily because I was never schooled in the world of personal finance myself, and I wound up making several egregious mistakes thanks to my horrifically lacking education in that area. All the same, instead of allowing my kids to make the same gruesome financial mistakes that I did in my younger years, I made a point of bringing my daughters up with several principles that taught them the importance of saving money as opposed to spending it.
I Talked Openly About Money
Money was never a taboo subject in our home. I talked openly to my kids about money, made them part of the family budget and required them to start keeping their own budgets at an early age. First, using their allowance as an income guideline, and later using their jobs as a source of income. I reinforced good fiscal habits such as keeping a register, and placing a dollar value on just about everything they were tempted to spend their dough on.
I Made them Keep a Piggy Bank
When my kids were younger, living on an allowance only basis, that allowance went directly into a piggy bank. This helped it from burning holes in my daughters proverbial pockets and helped them physically grasp the concept of making their money grow (and watching it at the same time), as opposed to growing apart from their money.
Piggy Banks Graduated Into Savings Accounts
As my daughters aged and moved into the realm of direct deposits and regular paychecks, their old-school piggybanks defaulted to new school savings accounts. Each payday, they were required to set aside at least 10 percent of their paycheck and redirect that amount to their savings accounts before doing anything else. However, they didn't do that. They impressed me and put away 20 percent.
Putting a Dollar Amount on Everything
Buying things is tempting -- especially things you don't really need. In fact, merchants make buying tempting for a reason. However, I taught my kids a simple principle: time is money; but it's not quite the principal you might think.
I had my children place a pay per hour value on whatever they wanted to buy. In other words, if they wanted something that cost $50, they quickly learned that that item translated into seven hours of work -- when they held down minimum wage jobs. Putting that in perspective was more helpful than I ever imagined when it came to raising hard-core, down to earth savers.
Raising money wise kids doesn't have to be complicated, complex or difficult, providing you are open about money and you set the foundation for the building blocks of raising savers instead of spenders.
Which way are you raising your kids?
More from this contributor:
Talk to Your Kids About Money: Having 'The Other' Talk
