Money Matters: Teaching Kids Savings and Investments
I had never been that mom who rushes in to teach my children how to count money or read a book. My stance had always been, "In time, they will learn. 6, 7, 8, 9 years old. 10 years old *shrugs* If not from school, from the real world." I focused on other stuff like "how not to make a mountain out of a molehill when you fall and scrap your knee".
So when my peers were telling me to let the kids practice how to purchase food and count change from the coffee shop, I just brushed those advices away.
"They will learn. On-The-Job training will teach them how to do all of these when they are put in a school setting without mama around. Besides, their teachers do teach them!" I adamantly insisted.
True enough, they figured it out on their own as soon as they entered Primary One. I don't think everything ought to be taught. Some things learnt through experiences and mistakes leave deeper impressions.
I also believe that certain principles ought to be taught only when they reach certain mental maturity. Thus, we have now introduced the Three-Drawer-Money-Box which reads "Allowance", "Investment" and "Savings". One for each child.
This came about during over lunch with my dad and his wife. You know how adults are ya? They come to a stage in life and look back, thinking what skills they wished they had acquired when they were younger.
Be Kind
Believe In Yourself
Meditation and Mindfulness
Money Isn't Everything but it is still Important for Survival. Learn how to Save and Invest.
While I never stopped harping to the kids about what kind of person they should be - morally upright and all - the gramps shared with me how I should introduce the world of Investments to Ewan and Faye. That it is about time they are educated on a deeper level on how money works. As the Chinese saying goes, "Wealth does not pass three generations."
Those in the first generation worked hard for the money and made sacrifices so that their children wouldn't have to. The second generation saw that it took for their parents to build the foundations, would be more motivated to preserve it. The third generation grew up without the struggle or may not fully grasp its significance. Thus spending their wealth more freely.
We are second generation and my kids are third gen. Instead of assuming that hard-earned first generation wealth would be passed down, we would like to teach our children to earn their own keep like how my dad taught me to earn my own. I was never given hand-outs and I worked during school holidays to earn my own pocket money. I think that method of parenting did me good.
No canteen aunty or teacher will be able to teach them about Savings and Investments. So it now falls on the laps of their parents to do the job.
Meyer and I agreed with this Three-Drawer-Money-Box.
The rules are simple:
1. Allowance: A set amount of money for the week will be placed in that drawer every Sunday
2. Investment: Money the kids choose to place in this drawer will see a percentage growth by the end of each month. This money cannot be touched until maturity i.e. at the start of each School Holiday [June and Nov]
3. Savings: This drawer's stash can be used for savings, charity or expenditure. It can also be moved to the Investment drawer if they wish to.
We explained that there aren't such amazing returns in the outside world and that there are relative risks in all investments too. We may include Investment Risk in this little home banking system in time to come but for now as starters, let us see where this goes!
Feel free to add in a simple ledger for each child to show them how balance sheet works, like we did.
I love it that we now have one less chore to do every morning and that is to fill their wallets with the day's allowance. With this Three-Drawer-Money-Box, Ewan and Faye have to decide how much to bring to school daily and step up on independence. If they forget to bring any money with them, then that's just too bad.
Now, to ensure I remind my son that I misspelled "Investment" on his second drawer lest he goes around telling people he had been dabbling with ivestment since 10 years old!
 |
| Like Us on Facebook if you enjoyed the read! |
Comments
Post a Comment