The other day on LinkedIn, we started talking about Keeping Up with the Joneses. And so in today’s DueNorth Insight, I wanted to talk a little bit more about how we can teach money to our kids. And I think that’s a great question, because keeping up with the Joneses is something that we all struggle with…we see the neighbor come home in a brand new vehicle, we see the other neighbor leaving with their new boat and it’s easy to get caught up in the fact that we don’t have what they have or we want what they have.
And it’s important to teach our children what being content is, but also the value of money. And so I want to touch on the three things that we focus on at home with our children. And the first is ensuring they know how hard it is to earn a dollar. So we have them do chores every week, and they earn an allowance for that. It helps them understand the value of a dollar by earning it.
Second we like to make sure that we have money as a topic of conversation. If we’re going to a ball game, or we’re taking them to an adventure park, it’s important to talk about the cost of that, so that they understand how far or how little a dollar can go.
The third way we’re teaching our kids about money, and money skills, is through the Bank of Dad. It’s where they give me money at the beginning of each month, that they can’t touch for that entire month. And in exchange for not being able to access that money, they’re rewarded with an interest rate. And that helps teach them about investing but it also helps them better understand that they should think about what they want to spend their money on before making those purchases. And sometimes you’ll have items come up where they want to buy it in that month, but they’ve put too much money away in the Bank of Dad and they can’t access it. It gives them time to really digest what they want to spend their money on.
And those are the three ways that we’re really focusing on to help our kids learn more about money and be respectful of the value of money and the hard work it takes to earn a dollar. And that’s today’s DueNorth Insight.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.