Susan Beacham, founder of the Money-Savvy Generation and author of The Millionaire Kid$ Club created a program to help parents and educators teach basic personal finance skills to children and teens. Using her Money Savvy Pig piggy bank, kids learn they have four options for their money: save, spend, invest and donate, and the basic building blocks for good financial decision-making. Susan shares her top five money lessons to teach kids, starting when they're young:
1. Put Skin in the Game
It's important to give children hands-on interaction with money from a young age. Let them earn it, spend it, save it, donate it and invest it, so they can learn to respect money. "All day long, children will be able to spend your money, but there's a very special thing that happens when they have their money in their hands," she explains. Children will think twice about spending their own cash.
2. Look in the Mirror
Parents need to see what kind of role model they are when it comes to spending money. "The most impactful teacher in a child's life is going to be Mom and Dad," Susan says. "If you want to know how your children are going to act with money, you have to take a good look at yourself." If your finances are organized, teach your children a similar system. If your money is a mess, get your finances in order.
3. Find Money Mentors
Children are inclined to listen to another adult, like a grandparent or other family member, more than their own parents. When Susan was growing up, her grandmother lived upstairs from her, and she learned a lot from their relationship. "Everything she said, even if it was identical to my parents, it just sounded better," Susan shares.
4. Teach Children Good Things Come to Those Who Wait
In a world of instant gratification, teaching children to wait can be difficult. But when kids ask for things, it's a parent's job to say no. Help your children plan for what they need and want. Susan suggests parents establish times when their children will receive money, like holidays and birthdays. The more time in between their cash gifts, the more successful they'll be at delaying their gratification.
5. Help Children Understand Tough Economic Times
If your family is suffering through a challenging time financially, it's important to have a family meeting to discuss expenses in the family. Writing down the wants and needs and making a priority list will help children see a new perspective. Realize that saying no to your children is much more difficult for you to do than for your child to hear.