Proverbs 21:20: “In the house of the wise are stores of choice food and oil, but the foolish man devours all he has.”
Dave Ramsey quote: "If you don't teach your kids how to manage money, somebody else will and that's not a risk you want to take! You, as parents, have the opportunity to be the positive example in their lives and the guiding voice that they can trust."
In Part 3 of Teaching Kids about Money we will briefly cover another habit that we want to instill in our children - saving a portion of their money. This can begin at an early age by having them put aside some of their allowance or birthday money for an item that they really want to buy. This will help them understand that you don’t always get what you want right when you want it! This concept of delayed gratification is a hard concept for people to learn at any age, so teaching it young will improve the chances of the concept sticking.
When the kids get a bit older you can take them to a bank and set up a savings account. I still remember taking both of our kids to the bank and setting up a savings account for them. The employee made a big deal out of the ordeal and gave each of them a stuffed animal – Sammy the Sea Otter – that the kids kept for years. They enjoyed visiting the bank and adding money to their accounts. It was also fun when they got their statements in the mail and could see the interest added.
Once in high school, discussions may start about wanting to go to college or trade school. It is important for kids to work a part-time job to save a large portion of their earnings so that they can be engaged financially in contributing to their future.
To be honest, the opportunities to teach your children to be responsible and to save their money for the next financial challenge seem to be endless. A few examples of reasons to save include purchasing a car, a spring break trip, study abroad, a professional conference, and establishing an emergency fund for when the car is accidently backed into something. Start teaching them basic principles as soon as possible. What you don’t want to create is an adult that according to Dave Ramsey decides to live on "Mom-and-Dad-will-take-care-of-me-as-long-as-I-want Boulevard."
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