most kids learn the maximum between the age of 1 to 6 .. they are like sponges … you can start teaching them about money ..
how to teach ..
here are some examples – value v/s price
- you show them an item , what is it’s cost .. and then ask them to find similar items for a lesser price – eg food , shoes
- instead of buying books or movies , you could take up a local library membership – which can give you a lot of movies and books for almost free
how to generate money ( some examples )
- when kids grow up , they can sell their older clothes , toys , cots – to someone else
- doing the lawns , taking care of pets , babysitting , fixing cell phone problems for elders
- take the older people to the digital age ( set up google chrome stick , fix internet issues , install amazon prime , spotify , digital payments , etc)
- delivering newspapers , magazines , groceries , food from restaurants
- when you buy a new toy for the child , tell them what the cost was .. when they sell it .. they will know what they sold it for .. this will teach them the concept of depreciation ( how the value of things go down over time ..)
difference between needs and wants
- groceries is a need , food is a need , a new pair of shoes when you have three pairs already is a want
- a want can wait , a need has a higher priority
the need for emergency funds
what is an emergency fund ? how much should they be ?
are the premium colleges worth the cost ?
do you really need a college like Harvard , Yale , Wharton , Stanford ? Can you do your education at almost 10 % of that cost at a community college ?
discuss the income , expenditure of the family with your kids
most people think they should keep the budgets away from the kids .. but we think you should encourage it .. use a pizza like diagram ( a pie chart ) to explain – where the income goes – housing , car , groceries , education , fun, entertainment , savings , investments
do offer the kids pocket money – see how they spend and invest
- offer the kids money per month / week / daily as pocket money for doing things around the house – like loading the dishwasher , cleaning the dishes , cleaning the room – it shows them the value of money
- here is something new – create an excel file with the amount they have earned as pocket money and offer them a decent investment rate of , say 10 % per year .. this will teach them the concept of investments , savings .
- show them their daily earnings in the income excel file whenever they want to , returns percentage every 3 months .. invest the money that they have earned in the stock market – low cost , index funds , nothing complicated …
- if they want to withdraw some of the money they have earned , subtract that amount from the excel file , pay it from your bank
- open an account with their name and you are the joint account holder , please monitor this account closely .. their own account will teach them responsibility
- as they grow older , teach them about the stock market – fundamental and technical analysis – let them open a trading account and trade on their own
- let them learn about income , profits , fixed costs , variable costs of a business , what drives up the price ..
- the difference between appreciating assets ( stocks , bonds , real estate ) v/s depreciating assets ( electronics , car )
good movies to watch about the stock market
- wall street
- wall street 2 – money never sleeps
biographies of famous persons and businesses
- as the kids grow older , introduce them to the biographies of great business people and companies – it will help them to start their own business
- introduce them to startup magazines like inc and entrepreneur
- introduce and encourage them to have regular startup business meets – will encourage them to share and grow their ideas – eg in india , there are incubator websites :
- small and medium business create a lot of future jobs
- it is better to be a job creator than a job seeker
more information about up to date ideas on startups , businesses
introduce your kid to podcasts by famous people some of them being
- tim ferriss
- gary vaynerchuk
- marc cuban (https://markcubancompanies.com)
- robert kiyosaki
- and others …