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I've just left a comment on this thread saying that talking about the money is a taboo because we were educated in this way. And the idea to create this thread almost immediately arose in my mind.
I have a little son and the question about how to correctly educate your child about the money is of great interest to me. I'm subscribed to different financial blogs and try to heed the experts' advice in this regard, but I'm just curious to hear the stories/opinions from the parents especially those whose children have already grown.
i have been talking financial topics to my kids as soon as i think they could absorb anything. i will always be doing it and i want my daughters involved in my financial decisions (and i want to be involved in theirs throughout their lives).
I've just left a comment on this thread saying that talking about the money is a taboo
Taboo to who?
Quote:
....and the question about how to correctly educate your child about the money...
Like most of all the other life lessons they need... steadily and consistently using terms they'll understand.
(just as we all should do with sex and death and all the rest)
When they are young you can teach basic math with money, and link that to value of products, and how money is obtained. Don't ignore questions about money. You don't have to go into specifics about household finances but definitely educate them on financial responsibility, budget, etc. Open a kids bank account so they can save birthday checks and piggy bank coins, have them balance their account.
When they are teens and start making money, offer to chip in to fund their Roth IRA. So if they make $2000, offer to put in $1000 if they save $1000. Change the ratio to whatever you feel comfortable. Explain the power of compounding over time, pull up an online calculator and show them how investing early in life can offer a huge return when they retire.
Add them as an authorized user on your credit card account to establish credit history, provided you have good credit. You don't have to give them the card until you feel comfortable, but it's much better to learn how to handle this when they are under your roof than when they are out on their own.
There are lots of opportunities to teach kids about good money habits, don't avoid them and most of all you need to exhibit good habits since they do pick up a lot from you unspoken.
We started to talk with my son about money when he was around 4 or 5 so he could understand that most things cost money and it takes work to earn money. Back then we let him know that if he does some chores such as clean up his toys or help one of us out by listening. Now he is 9 and realizes that it takes money to buy something. It's fun to see that he likes to save money that he gets as presents, completing chores or even finds money on the street. He will save it and sometimes decides that he wants to buy something on his own. It's usually small things, but it's nice to see him aware of finances. We have opened a savings account for him so he know he can go to the bank and deposit money. He decided that instead of us putting cans/bottles in the recycle bin, he can recycle them and get money for them. So he set up a bin at home to collect all empty bottles/cans and once the bin is full we take them to Costco to exchange for money.
We starting discussing money with our kids as soon as they could comprehend some of the ideas.
Much like would told our kids how many sleeps until they see Grandma or how many Arthur episodes the ride is, we began describing how many hours/days/weeks we had to work for something. The mortgage was one week of Mommy's time at work, the new car was a day of Daddy's time at work, vacation was a month of both Mommy and Daddy working....
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