Our 6 years old daughter starts to get an interest in money and banking. This seed that she has, needs to be cherished and taken care of so that it can grow. I look forward to be her guide during her journey. Hopefully, a short journey to FIRE.
As we know, not every step is an easy, joyful step. And so, we had a first tough step to take with her.
Here is some background. Since September, she gets an allowance of 1€, every Sunday. In the mean time, she knows this very well and does not hesitate to remind us in the case we forget. The money goes straight into her savings pig. We tell her the money is hers and she can do what she want it.
Next to that, when she gets money from the grand parents for new year, birthdays,… We tell her that we put it on the bank. She is fine with that.
Recently, she asked if she needed to chip in for the ski holiday when she heard my wife and me talking about the costs, later, she did the same when we talked about the summer holiday. We agreed she would buy us a drink next time we go to town and have time for a visit to a child friendly bar.
This Saturday, we went to town. Before leaving, she wanted to exchange her coins into paper money, somehow she likes that better. She wanted to exchange 20. As she only had 16, I offered her to exchange already 5. Then, hells brakes loose…
It turns out that she expected to have a bankcard, just like we do, so she can go and withdraw whatever she wants, just like we do. She knows she has more than 20, so, why can she not access it? She does also not sees the value to keep money in the bank. It can be spend as well.
Lets’ stop here: some education is needed
After listening to her, we started to explain how our money gets on our account (working…), what happens when the account reaches zero (tough luck, no more spending that month) , and more importantly, why she needs to save money as well: not all money is for spending.
She gave it some thinking, and in the end, we agreed she could use the money for herself. And in addition, she now will keep the savings account. We went out and she bought a nice set of earrings.
To us, adults, this is only a small step, for her, it is a giant leap! I am curious to see what other money/saving/spending related topic she will throw at us.
amber tree leaves 
O yes, teaching children the value of money. Not an easy task. We have no children so you would think we do not have this issue. But with no children you start to think about your inheritance. The one nephew we have is the most likely candidate. The problem is that his parents are not exactly frugal persons. So our issue is how to teach a kid the correct money values even if it is not your child? The alternative will be to leave the bulk to charities of our choice …
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Sounds more complicated than our case. At least, we are in charge…
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It is more complicated! So any tips you have are more than welcome! He is also 6 years old, so perfect match there. i’ll have a talk with the girlfriend, perhaps we will set up a paypal account for him and start with an allowance that way or something like that. I would like to move away from the gifts just appearing out of thin air on birthdays and such: so perhaps a paypal account where he can witness how we ‘save up’ for his gifts and then go buy it together stuff like that (everything off course first checked with the parents).
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Tips are hard to give… we are exploring day by day. How about setting up a monhly saving for him, under your name of course, so that he can see how oney grows. When there then is a need for something, you can take it there. My wife and I both have this for our godchild… IT slowly adds up, by the time they are 18 (or a little older) we can give to them when appropiate – moving out of the house, deciding to go on a world trip, or even better: starting to invest!
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Cool story! Very curious to see when Miss CF will start to get an interest in her own money (have an investment account for her). Have been talking about work, money and needing money to buy things. She does show an interest and even want to pay at the grocery store with our bankcards. Quite amusing actually. No banking crisis just yet, but then again, she is only 3.5 years old. Should not expect too much at this age 🙂
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Danger spotted… Paying with the card of daddy…! 😎. Our 4 year old could not care less…
The question of a first investment account is interesting.
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Great story, ATL! I remember teaching our (now 22 year old) daughter her first money lessons. It’s amazing how fast they grow, and you’re doing well to start young with the lessons. One of my fondest memories was when she spent $3 of her own money to buy me a stuffed Gorilla golf club cover. She was SO proud of that gift, and she learned that giving can be more enjoyable than receiving.
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That is a great memory. …
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very interesting read, thanks for sharing ATL.
So 6 years old is enough for money basics? I expected to start teaching money lessons to kids at least at… 10?
Anyway, I’m curious about how things will go. Keep us posted 🙂
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Scholl did help a bit: they have learned about the coins and notes and that 10 cent is not the same as 10 euro.
We have been mentioning money to them over the past 2 years. Only since this summer, it starts to resonate…
next step; what is an ETF! 😉
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this merits a separate topic: money and kids. My oldest turns 10 this month. no financial education so far; and I am hesitating to start. I wonder if it is not better if they are left in the unknown for some time more, till 12 or so. I do save for them though, but they only know that their birthday gift money goes to a bank account. so far no questions asked…
M
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I have no idea on the right age to start. We decided to start early. Maybe some research is needed…
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Hi Ambertreeleaves,
It is good that children learn the value of money at an early age. I know that I liked to save my coins as a child and when my parents asked my why I told them that I wanted a swimming pool just like scrooge mcduck 😀
Cheers,
DC
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Interesting story. I think I too once asked my mother why she couldn’t just get a bit more money out of the wall. When you’re so young everything seems so simple.
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It’s great to start teaching your children about money early. I saw so many kids at college run up huge credit card bills and overdrawn checking accounts because they didn’t know what they were doing.
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I think that’s great you started early! Ours is almost three so I enjoy reading stories like this. Sounds like we’ll have some fun ahead us! I look forward to it!
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Keep me posted on your findings. Any help and input is welcome
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My daughter cried and accused me of trying to take her money away from her when I suggested a bank account….
https://fumbledreturns.wordpress.com/2011/10/27/how-not-to-teach-your-kids-about-saving/
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i hope to do smething likes this when she s older (2now) http://www.mrmoneymustache.com/2015/05/20/what-im-teaching-my-son-about-money/
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Thx for sharing
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Cool story! Like those ones 🙂
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we started later: at 8 years old we gave 5 euro weekly (maybe too much) , money to buy a pencil and an ice-cream. She collected already 100 euro.
I think for every 100 euro collected to give her an extra 1 euro as bonus (as an interest gain 😀 ) .
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A savings incentive could be a good idea
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Interesting story ATL. It’s hard to know exactly what to do with kids and what to teach them. There is no right approach! Very recently read a blog post by one of Australia’s leading money people: https://barefootinvestor.com/how-not-to-raise-a-spoilt-brat/ (Ignore the title) Has some pretty good tips there 🙂
Tristan
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thx for pointing to the article. I like this phrase: Understand that pocket money isn’t about the money — it’s a tool for financial education.
We will try to do that!
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