I am thinking about how to educate the kids about money. We talk to them about money and how we earn money, and how each thing costs money (even the water we use in our house costs money). But, I want to give them the education about the future and money.
We bought these banks for them:
BANK
I really like them. There is section for SAVE, SPEND and SHARE (charity). I think it is important for them to be able to decide what they are going to spend their money on and when. Of course, some of it is non-negotiable. Birthday checks and the like go into the college savings account, and they have no access to that. Once they have a big chunk in the SAVE section, we deposit that in the bank account. Of course, they only earn a penny a month in interest. It is hard to teach the concept of compounding interest, if you only earn twelve cents a year! The reward for saving is. . . . twelve cents.
Of course if they want to buy an IPAD, put the money in the bank, until you have saved enough, and then you can spend it.
The SPEND section is for them to buy whatever they want. If they see a toy that they want, and they want to shell out their money, then go ahead. When the money runs out, so does the spending.
The last section is SHARE. Every year each kid says "Can I have money for UNICEF?" or "Can I have money for the Red Cross." This is their money, and they can support whatever fund they want to with it, which I love. I want them to care for the world, but they also know that money doesn't grow on trees in the backyard. . . . (too bad).
What is your method for teaching kids about money, and do you have any ideas that you can share with me?
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