Many times the best advice is the simplest advice, and who better to dispense simple wisdom than children? Adapted from Navy Federal Credit Union’s website and an article on wisebread.com, here are ten important financial lessons you can learn from walking a mile in your kids’ light-up roller sneakers.
- Use your imagination. You can spend hundreds on a flashy new toy for your kids, and they end up spending more play time converting the refrigerator box into a rocket ship. So maybe, before you splurge on a new toy for yourself, think how you can re-purpose something you already have.
- Always do your homework. Our kids know that homework, research and studying are needed to excel in their classes, yet how often do adults make seat-of-the-pants investing or spending decisions? Researching before major expenditures is a good way to save and buy smarter.
- Learn from your mistakes. Letting your kids make mistakes is an important way to help them learn and grow. As adults we should understand that failure does not come from making a mistake, but from refusing to learn or change our behavior after making one.
- Save your allowance. Early on, kids realize that if they don’t spend their allowance as soon as they get it, they can save up and get something special. Adults often forget to “pay themselves,” and regularly contribute to a long-term savings account, whether it’s a retirement account, college fund or even a vacation fund.
- Share. We reward our kids with a new and often expensive toy, and then tell them to let the neighbor’s kids play with it. It’s one of the key lessons we rarely practice as adults – when was the last time you let the neighbor joy ride in your new car? But there are many ways to share our good fortunes without risking an auto insurance hike, like giving not only your treasure, but your time and talent to a favorite charitable cause.
- You can’t spend more than you have. It goes along with the previous point – if a kid gets a $10 allowance and wants a $12 toy, he knows he’s going to have to wait till he can come up with another $2 before he can make the purchase. Millions of Americans drowning in credit card debt because they failed to live within their means and have lost sight of that basic principle.
- Ask a lot of questions: At a certain age (approximately 2 through 30) kids refuse to just follow your directions or advice and ask a hundred questions (99 of which are “why?”). So you should ask questions until you completely understand the terms of any financial agreement or major purchase you are making.
- You need a security blanket. Your kid sleeps much better with his “blankie”, or teddy bear or night light. And you’ll sleep a lot better knowing you’ve saved up some money in case of emergencies.
- It’s the little things. A simple reward like an ice cream or going out for pizza can encourage a kid to complete his chores or get his homework done. You should also reward yourself for good financial behavior with a day at the spa or a new pair of shoes.
- Money is not the same as worth. Somewhere between grade school and high school, kids begin to view their peers through the filters of social status. How many rich high school kids hang out with the poor ones? But little kids don’t ask their classmates what side of the tracks they live on before sending out invitations to their birthday party. What a great lesson for us all to re-learn.
Steve and Mia
12 ways kids can Teach Us About Money by Mardee Handler, wisebread.com, July 17, 2014.
What Kids Can Teach You About Finance, www.navyfederal.org.