The best gift money can't buy?
This came up on Facebook last week: how can we teach children about money and personal finance?
My family was not really money-savvy growing up. We didn't talk about money much. It was an age of adequate work pensions and investing was something rich people did.
Even though I went to a private school in the UK (on a scholarship) and a good university, personal finance never came up, not in classes nor out of them.
Recently I've been teaching my university students about personal finance in elective English classes. It's a lot of fun but it's also painful to see just how little these intelligent, curious, and highly educated students know about money.
So how can we do better with the children in our lives?
Well, one thing that doesn't work is sitting down and making them learn. I tried this with my youngest daughter: we would read a couple of pages of an introduction to finance together and then talk about it. I needed help reading the kanji, she had no idea of the concepts. Rather predictably, the habit didn't last long.
Instead, I think the best thing you can do for your children is to share your finances with them. Talk about money. Talk about your work, and how much it pays, and how you use the money. Make sure they understand appropriate ways to share this information with others, however ;)
Take them grocery shopping, or even better, send them grocery shopping. My mum had me doing the shopping at home from the age of nine or so when we lived in Spain (probably helped that the shops were only a few hundred meters away). Understanding a budget, comparing options and choosing the best one, and deciding not to buy things are essential life skills, and a lot of children don't have them.
Open a Junior NISA account for them, and as they get older get them involved with operating it. The more they understand the more interesting it will be, and this will help prepare them for the moment they get control of the account when they reach the age of twenty.
It's easy to find articles about this topic: Forbes, ten lessons, age by age guide.
What do you think? How do you help your children understand money? Any experiences to add?