Teaching your Kids to Live Rich
Kids consume. That’s what they do. You give them something they like, and they’ll always ask for more. And as a parent of two boys, ages 7 and 5, I can tell you that buying them stuff is fun.
But here are some interesting stats: 60% of kids under the age of 18 have savings accounts (a vast majority were started before the age of 3) and 50% of parents provide their kids with an allowance.
So, at a very early age, our kids – these bottomless consumption machines — get involved in the world of “money.” The last thing I, as a parent, would want is for my kids to begin connecting the dots between their desire for boundless consumption and money. So, how can I teach them at an early age that money is not all about mindless consumption? That there are many ways for someone to live rich and spend smart?
Here are three tips:
1 – Use pictures to show the value of experiences over stuff. Getting kids to value stuff is easy. Toys, food, shiny gadgets… these things bring easy smiles. But how do you get little people with really short attention spans to learn to value experiences over stuff. It’s easy. Show them pictures. My kids love looking at themselves in pictures. We reminisce often about the simplest of moments over the quick photos I snap with my smartphone. Through this practice, they’ve learned that doing stuff can be just as fun as buying stuff. And now they’re even starting to take pictures of their own.
2 – Give away toys. A key life lesson: ‘tis better to give than receive. This is a really tough one for kids to understand. But old toys represent ample opportunity for practice. When toys run out of fashion with your kids (and you KNOW when they do), make it a practice to give them away…assuming, of course, that they’re still intact. Definitely have your kids be a part of the act of giving – to other friends, to other kids in the family, to charities, etc. You can even reward them with a new toy if you want. I think creating a habit of giving is well worth the price.
3 – Have “goal” centric allowances. Providing allowances for “good behavior” or “doing chores” is a great and common practice. However, lots of parents I know provide general allowances which can be spent on nearly anything at any time. I much prefer allowances that are focused on specific, small goals. To me, the smaller and more frequent goals, like buying a favorite candy, are better than the big ones such as an expensive toy or game. This way your kids get a frequent feeling of accomplishment and the value of money tied to “work” is constantly re-iterated.
You can never start too early. Like I said, kids are fun to spoil. I get a ton of enjoyment seeing my two boys happy, laughing, playing and content. But the three tips I’ve shared above generate all of that in a way that the latest, greatest LEGO set cannot. I hope it creates long lasting values. Perhaps one of the greatest lessons I can teach my boys is what “Living Rich” really means. And how “Living Rich and Spending Smart” is definitely not an oxymoron.
What tips do you have to share with your children to live rich and spend smart? Share them with us and you could win $5,000 plus a money makeover by David Bach. Enter here to win.
Written by Alex of Moven, featuring his sons Andrew and AJ.