Beyond Allowances: Teaching Your Kids to Save and Invest Money Wisely
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Want your kids to be money savvy? Learn how you can teach your kids to budget, save, and invest wisely!
Do you remember how you handled money growing up?
I can’t recall when I got my allowance, but I remember being in second or third grade going around the neighborhood collecting bottles and cans for recycle and earn some extra money.
And as grateful as I am for learning what I did, from how I mismanaged money later on and got into debt in college, I can see there were some gaps in my financial knowledge.
My husband and I both want our girls to know the value of a hard earned dollar and how to use it wisely.
That won’t happen by accident. It’s going to take a plan.
If you two want to help your little ones, make sure you save this episode.
Bill Dwight, creator of the amazing family banking app FamZoo is here today on the show.
Besides being a tech whiz, he’s a father of five who’s had plenty of experience with the ups and downs of raising kids to become adults.
In this episode we get into:
- When to start introducing finances
- Getting your kids comfortable with saving and investing
- Why your kids need to get a loan from you
I think we’ll have plenty of comments on this one. 🙂 Hope you enjoy!
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Resources to Teach Your Kids about Money
If you're looking for ideas and resources to prepare your kids to be money-savvy, here are some to check out!
- FamZoo
- Thriving Families
- How to Teach Your Kids About Money (w/o Being Boring!)
- The Opposite of Spoiled: Teaching Kids about Money (and More)
- Cash Crunch Junior: Have fun while learning about money with this board game!
- Goalsetter: Rally your family and friends together to support your kids' gifts. Goalsetter allows them to give meaningful gifts that support their dreams!
- Collegebacker: Saving for college just got easier!
Introducing Money to Kids
One common hangup parents have with introducing finances to kids is that they somehow think it's about the numbers.
Bill points out that our first conversations about finances with our kids can begin by taking a step back and looking at the bigger picture – your family's values.
Ron Lieber always says one of my favorite quotes..'Every conversation about money is really about values. …
You know the two are intimately intertwined so I think a lot of people apologize when they start talking about money and then you realize hey these are
Bill Dwight [3:55]really values-based conversations and something we should embrace.
With that in mind, you can begin these chats with your pre-school children.
As you go shopping, include them in the process. Talk about what you're buying and why.
Introduce the concept with budgets with something on their level. When we go shopping, for example, our three year old knows that she can pick out one snack.
There will be times, she'll ask for a second (or more), but we tell her, you can only pick one, that's what we planned for.
So without using the word budget we're telling her she has a choice on how to spend her ‘money'.
Beyond Allowances: Getting Kids to Save and Invest
We had a fantastic discussion about allowances last time Bill was on the podcast.
For this episode, though, I wanted to focus in on the other side of money – saving and investing. How do you engage your kids?
Bill had some helpful ideas. One of his favorites is parent paid interest.
..You encourage them to grow that bucket by paying them a parent pay the interest rate on it.
So just do a little simple math. You know, maybe point 2 percent a week or whatever.
I'm willing to do it weekly….so they're constantly being reminded.
‘The money I'm saving is working on its own and growing on its own. And if I leave it alone it'll continue nonstop'
Bill Dwight [12:35]
Loan Money to Your Kids?
What do you think? Would you loan money to your teen?
Whether you live debt free or believe in good vs bad debt, Bill made a compelling
Just like with savings, he encourages parents to work weekly. Instead of notifying your kid they're earning money, you have a system that reminds them of the ‘payments'.
That sting may be enough for them to minimize or avoid unnecessary debts.
Takeaways from the Episode
Happy Bill could join us. He and his team have created a fantastic tool for families over at FamZoo. It’s truly a family banking system that’s easy to use.
Before we close up I want to focus on some key takeaways I got from Bill.
- Your example and conversations are important.
- Incentivize good behavior.
- Focus on values over numbers.
We’re going to discuss this in our private Facebook group over at Thriving Families. It’s free and fun!
We’re going to swap ideas and stories about our kids and how we’re helping them.
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Music Credit
Like the music in this episode? Our theme song is by Gentle Regime. Additional music by Lee Rosevere.
