By Cheryl Lock for LearnVest
For more about how financial experts educate their children about money, visit LearnVest.com.
We go to great lengths to teach our kids about money.
Still, we’re always interested in how other people teach their kids good money habits … especially when those people are financial experts.
So we asked a whole bunch: Ranging from LearnVest experts, who are there to help you create a financial plan that works for you any day of the week, to other CFPs® out in the field, to be sure we turned up all of the best tricks for raising financially-savvy children.
Here are the most valuable lessons they’ve put in practice with their own families. Read and learn.
1. You Have to Earn to Spend
I have two college-aged kids and one who is a senior in high school, and I’m really into having them budget. I give them a monthly allowance at college that covers the basics, but they have to earn money to pay for anything extra. I’ve never made them work, but in order to have money to spend, they’ve chosen to … even at McDonald’s. Teaching kids the value of a dollar is important: I’ve also taken my son shopping and when he really wanted a particular shirt, I suggested he buy it himself. Surprise! He didn’t want it as much then. —Cindy Golub, principal with G-Squared Advisory and LearnVest advisor
2. Money Is About Making Choices
Since my daughter is only 4, it’s difficult to teach finance in terms she can understand. She has offered to buy her babysitter a car (it’s going to be red) and a house (she needs more bedrooms). It’s sweet and unselfish, but a little on the impractical side. So now we’re teaching her about waste, and why we buy one thing instead of many when we’re at the store. We instill in her the idea that there are choices to make to live a healthy financial life, rather than “having it all.” —Amy Banker, Director of Client Services at retirement planning firm
3. Delaying Gratifications Can Pay Off
We helped our son relate the idea of earning money for doing specific tasks or goals by paying him for extra chores he did around the house. So for example, we would have him scoop dog poop for $0.50 per pile. He got smart and figured out that if he waited a week, then he’d have more to scoop, and he’d get a bigger payout. Gross, but it worked. —Brian Tinker, CFP® with Penniall & Associates
Check out this story for more about how (or whether) to give your kids an allowance.