[Earl]

I figure this Community would enjoy this… The other week my 6 year old daughter comes out of her room holding her change bank and says, “Daddy, let’s play investing!” Even though she is 6, I’ve trying to teach her about money, different ways to manage money, and (the tough one…) delayed gratification.

I usually use quick “isms” or catch phrases that I borrow for financial people much smarter than myself. I sometimes go into long boring rants, and even my wife’s eyes roll into the back of her head.

Does anyone have any suggestions on getting the “littles” educated on smart money habits? Are there any good books or apps out there for 6, 7, or 8 year olds?

Thanks in advance.

[Chris]

I never liked the save, give and spend idea. Instead, I told my kids if they keep their money in the bank (me) then I would give them 10%/month.

It was easy math and they started off with no more than $100 in the ‘bank’. Once they realized that saving really paid off, they would really think about the things they wanted to buy.

If they ever asked for anything, then I always told them, you have the money. I did keep their allowance low and the interest made up for it. They started saving so well that I had to lower the interest rate, but by that time they saved well and there were also never arguments at a store if they wanted something.

We always said, go ahead and buy it with their own money.

Don’t miss: What is the best finance/money book for 4th grade kids?

[KC Kline]

Delayed gratification- give her a small serving of her favorite treat. Tell her she can eat it now or let her see a timer count down for 15 minutes and tell her she hasn’t eaten the treat when the timer goes off she gets a second serving. If she passes the test extend the timer a little the next time.
For investing, let her legitimately earn money doing chores, and then request to “borrow” it from her for a short period of time (a day) with the promise to pay it back with some interest. Ask her to “re-lend” to you the new higher amount.

Ask her to compare the first payback from the second. Kids 6-8 are usually not equipped to understand the markets and the time horizon/risks. For the business side can always do a lemonade stand.

[Kelly]

You can check with your bank. My bank had videos and handouts that I used to teach my son. Fortunately my son is an old soul so he is mindful of spending and already picked up on basic money skills lol

[Lindsey]

Parent of 4 here — We like to say “more is caught than taught”. Modeling fiscal responsibility is the biggest teacher.

We buy second hand stuff and show them the price of new versus what we can find on consignment, marketplace, yard sales, etc.

We aren’t shy about discussing our own finances and what we spend money on (or why we choose to not spend $$ on certain things like trips to Disney that would involve airfare for 6).

We discuss what charities we donate to and why. We’ve always had an envelope for “giving” , and they give their own money at church or to other organizations they are drawn to. If they have a “significant” amount to donate ($40+), we take the funds in person to make it feel more real.

My son got interested in investing by watching his ESA account, and discussing the different things we had his money invested in. He’s now 11 and has his own dog walking business (he’s homeschooled) and isn’t a big spender. We let him start his own investment account and he chooses (with our guidance) what stocks or funds he invests in. He has a stocks app on his device and loves watching what the stock market does every day. He actually just put another $700 into his account. His first move was to buy a full share of MGK (his favorite index fund). My sister likes to joke that he will FIRE before he’s legal age.

My 16 year old is now driving and has his first job. He’s more of a spender…. But we have an excel budget that we go over together each paycheck, and he has envelopes saved for gas, spending, and cell phone $$ for the winter months when he won’t be working. His first few paychecks between $100-200 felt like a million dollars to him, but a summer of doing fun things with his friends , eating out and recreational activities, he is quickly learning how fast money can go.

Explore these too: I have a funny story about teaching your kids to be frugal

[Anne]

I explained very simply about money in piggy banks and banks ‘resting’ and money invested ‘working’. They got that quite easily. Now they are older I’m using the financial lessons from Santander.

There’s a great lesson on investing in a school fair they will relate to either investing in slime or a cake sale.

Also, Usbourne do a great book on Money.

[Kim]

Start her a savings account and let her save to grow it.

[Author]

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