Building a Financially Savvy Child

Yesterday, my daughter went to the store with my wife to find a birthday present for my nephew.  My daughter made sure to take her little money box with her in case she saw something that she wanted.  She keeps her allowance in an old plastic mayonnaise container that we had in the cupboard.  Anyway, I dropped them off and ran to another store while they were shopping.  When I got back and met them outside the store, my daughter was very excited to show me that she had purchased something.  “Daddy, Daddy!  Look what I bought!”  She showed me the new case she bought for her Nintendo DSI and, as she took it out of the bag, she was even more excited to tell me about the price.  “It was in the clearance section and the price was 30% off the clearance price!!  Isn’t that a good deal, Daddy?”

I had to admit, I was proud of her.  We talk a lot about always trying to purchase things on sale, and only buying what we really need or what we really want.  She has been wanting one of the cases for months but it never made it to the top of her priority list when she was thinking of things she could spend some of her allowance on.  When she saw it in the store for roughly 60% off, she decided it was finally a good value.

I’ve really struggled to figure out how to mold our daughter in to a savvy consumer and at the same time try to downplay consumerism.  It’s not an easy concept to teach a 7 year old but I think it’s something that happens over a long period of time.  While I’d like to see her thinking about the “long game” of investing for her future, it’s just not something she can wrap her head around yet (although she tries to tell us that she is “saving her money", she’s really just saying that she’s fighting the urge to spend it right away).  As she gets older, I think she’ll understand it better.  We talk a lot about how we are saving for our future and how we try to enjoy our time now but also plan for a time when we don’t want to work.  She gets it, but it’s not a very relatable subject for her at such a young age.  We’ll keep focusing on making good financial choices as she grows up and most importantly we’ll keep talking about it to make sure she understands our approach to personal finance.  My hope is that she’ll evolve in to a very financially savvy individual so that she won’t end up on the financial hamster wheel of life like so many people these days.