Finance Friday: Succeed With Money by Following Advice Meant for Kids

My son is getting old enough that he is taking an interest in money. He hordes any spare change that he finds around the house (my pockets) in his piggy bank. He asks me to bring him pennies from work instead of candy. He knows that his stash is growing, and he is beginning to have a desire to spend it. The other day he actually  offered to pay for some pizza with his money. I told him that 3 dollars worth of pennies would not buy much pizza. He just looked at me like a cow looks at an oncoming train. This new fascination of his has got me thinking that it is time to start teaching him about money.

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So as I do with anything I decide to do, I set out on an epic quest across  Google, Wikipedia, Forbes and any other website I can search out for some direction. Most sites recommend the same basic principles for teaching your kids about money. Here are five of those recurring themes.

1. Go shopping together - Teach your kids about pricing, brand names, unit prices and getting the most bang for your buck.
2. Save for the future - Teach your children to put some of their allowance away for rainy days. That's why they use a piggy bank.
3. Pay taxes/bills/tithes - As children grow, it is important for them to learn about spending that is not just for them. Help older children understand taxes and utilities or other bills. If you are a religious family, teach the children to tithe.
4. Open a checking account and keep a register - Opening a checking account is a rite of passage for children. They learn about withdrawals, deposits, reconciliation of statements and record keeping. If they are not dedicated to learning to keep track of the account, they might even learn about overdraft charges (stupid tax).
5. Set limits - This can start very early, but take years to fully sink in with our kids. Just because we have money, it does not mean that we should sen it all on a whim. This is also a good way for them to learn about the family budget.

As I read these same tips on several websites, blogs and columns I began to notice something. Many adults need to learn these same lessons. We could all use a fresh, childlike look at our finances.


Seriously, how many of you reading this article today use a written budget each month that account for each and every dollar that you bring in? How many of us keep a check register and reconcile it with our bank statement each month rather than checking our online banking app every few days? How many of us save 10 - 15% of our pay? How many of us shop around for the best deals rather than just buying everything at the superstore each time we go shopping?

If we all take a step back and look at the basic financial wisdom that we were taught, or that we teach to our children, we can set a great example of the right way to handle money to our children. Do we really need to worry about our 401k or credit score if we are not able to balance our checking account? I challenge each of you who read this blog to implement these 5 basic steps that we teach our kids into our life as follows:

1. Shop around for great deals, or at least compare prices within the store where you shop. Coupon for bonus points.
2. Set 10 - 15% of your paycheck aside for the future. Roth IRA, 401k, CD, savings account... it does not matter, just save. I am no tax guy, so if you want to know what is best for you, consult with a tax professional in your area.
3. Spend money on things that are not just toys. Pay your bills, tithes and obligations before spending discretionary income.
4. Keep a check register and reconcile it with your monthly statement. If a problem does arise on your account, your banker will be thrilled to have a check register to help solve your problem.
5. Create a budget that accounts for every dollar that you make. Sit down with your spouse or family at the beginning of each month and make a plan for your money. You will be amazed at how much money you waste without a budget.

If we all do these 5 things, and teach our kids to do them as well, not only will we have more success with money right now, we might actually all get to enjoy retirement one day. Take a minute to let me know what kids lessons you have learned from in the comments down below.