Money and Children sometimes go hand in hand depending on your wealth, If you’re like most families having a child means that your family will drop in wages, and usually the father will continue working. Why would you teach children about money? When is best to teach children about money? Who is going to teach them?

This is something that is close to my heart, being that I wasn’t taught what to do with money but I grew up around money and from a family with money! My grandfather had money and taught us to stand on our own feet and to earn it for ourselves, so at the time I thought he was “tight” but it means that through my teens and adulthood I have also been very frugal with money. Therefore I want to make sure Pyper grows up with an appreciation of money. It’s like water it slips through your hands very fast, so make sure you don’t carry too much at once.

So if I answer my own questions but starting with the last one first – the answer would be – I’m going to teach her about money, and that will involve around the age of 4 years old, after she is taught about numbers, they go hand in hand. I will start with a play cash register and then progress to pocket money and then to helping her to getting a job and managing money for herself. 4-5 years of age is a good time to teach them about money. It doesn’t mean that they will immediately understand but if its tied in with numbers then it should have a much better chance of being incorporated into their learning.

To illustrate my point here is an extract of an article from “The First National Bank of Dad” by David Owen

When I was a kid, the idea of putting money in the bank was incredibly boring. The biggest reason was that the rate of return was slower than molasses - a year seemed like forever to me then and thus waiting a year for $100 to earn $2 more was unbearable - why not just spend the money now? This made me not want to save - it made me annoyed by it because my parents would make me save anyway. I had a similar feeling about my piggy bank.

So how can you make it so that children want to save? You have to speed up the compounding to the point where they can see the benefit. Owen opened up “The First National Bank of Dad” for his children and invited them to deposit their money. He would pay them a rate of return of 5% a month - enough for them to grasp the idea. If they gave him $20 and let him hold it for a month, it would earn $1. They could also withdraw at any time. Owen managed all of this in Quicken.

If my parents had offered me that, I would have jumped all over it, and Owen’s kids certainly did. On allowance day, they’d usually hand it right back - depositing it in the Bank of Dad - and he’d give them monthly statements on their money.

Why teach children about money? Good question – somewhere along the line they are going to have to deal with money, if not their own then someone else’s??They need to be taught what to do with it and how to manage it correctly! Otherwise they will think it’s easily made and easily spent, I will make sure that Pyper respects money.

There was a program called “Wife Swap” and the father gave their children so much money, out of that money they had to give back 10% for Tax, 20% for Saving, and the 70% they could do with what they liked, I thought it was great, it taught them that there is a Tax man in your life and legitimately there always will be one, and it also taught them about saving. I would use the same example with Pyper.

Our society is based on Debt and how much money people can get a loan or can get on their credit cards, by teaching kids about money it will stop parents and society having to worry where they will find the money from when they get older.

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