Missouri, Tennessee, Utah and Virginia require that high school students take a personal finance course to graduate. If you don’t live in one of those states or your children are younger than high-school age, you might have to be their first teacher on this subject — that’s how to raise money savvy kids.
Start with a Piggy Bank
Buy your children a piggy bank to get them started on saving.
Give them a small allowance to start, and if they want more money, make them do some extra work around the house to earn it.
It’s important to teach them to save first and then only spend what’s left over.
Make sure they understand they aren’t saving just for the heck of it; teach them that you save for a financial goal.
Compound Interest
Teach your child that the earlier he or she starts saving and investing, the longer their money has to compound, and thus the more their savings will grow.
Opening a savings or money market account is an effective way to get that across.
Once your child sees his or her initial deposit increase by even a penny, it might help him or her understand compound interest.
Raise Financially Savvy Kids
Teaching kids about money and investing is very important, and it is up to you, as the parent, to teach them.
The value of money, how to use it effectively, and how to make it work for them are all important lessons to teach them.
By guiding them early on, you are setting them up to become responsible, financially savvy individuals.
Readers, what did your parents teach you about money?
Jackie Cohen is an award winning financial journalist turned turned financial advisor obsessed with climate change risk, data and business. Jackie holds a B.A. Degree from Macalester College and an M.A. in English from Claremont Graduate University.
