We all love to shop. Making a purchase has been scientifically proven to send a rush of dopamine through our system. Our kids feel the same thing with the excitement of a new toy. I get it every time I get coffee and a pastry, no judgment please. Whatever your vice is, as the New Year turns over, we can consider it a fresh new start. Financial fitness comes to mind and things such as The Latte Factor and how to translate that for kids. Finance isn’t taught in the majority of schools so it’s up to us parents to set the tone for a new generation of savers and investors.
On the fourth day of Kwanzaa, we learned about Ujamaa (OO-JUH-MAA) which means Cooperative Economics. Just starting the conversation about money in a healthy way is beneficial. Lots of parents, including myself, say things like ‘that’s too expensive’ or ‘I can’t afford that’ to our children. This helps shape their mind as general economic principles start to form. One of my personal goals is to improve my own and my children’s relationship with money.
There’s lots of online help out there. I read a post from the blog of Natali Morris, “Why you shouldn’t pay your kids to do chores”. In it, she mentions a book that I picked up from Amazon immediately, ‘The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money’ . It touches on the concept of splitting cash into three categories: give, save, and spend. For every dollar earned, kids should give a portion, save a portion, and then have some for spending. Both the blog and books were very good reads full of suggestions and solid info.
Another one of my favorite economic influences is Dr. Boyce Watkins finance professor and author. He has created online financial courses via The Black Business School. The school offers numerous options for adults but also great courses for kids, teaching financial leadership, stock investing, and many other pertinent money matters. They even have a guide to homeschooling!
Now for the Latte Factor. This concept was first introduced to me through a book recommendation: ‘The Automatic Millionaire’. And it’s not as cliché as it sounds. Author David Bach describes how to successfully retire just by cutting out a latte a day. Not everyone prefers the satisfying taste of caffeine so this can apply to other minor purchases that we can live without. We all have something that we may spend money on unnecessarily. This applies to adults but we can certainly start our children off early with this concept. By saving and then investing just a few dollars a day we can live comfortably by the time we want to retire, and the younger we start, the better! This book was such a good read I recommend to everyone and will be reading it again.
There’s also a fantastic program in Manhattan. World of Money is a New York City based non-profit organization whose mission is to teach financial education to youth. Providing a professional, upbeat and educational environment of up to 40 classroom hours. Aside from their community service piece, the curriculum also entails business communication, body language, business etiquette, history and flow of money, financial institutions, contracts, savings, check balancing, bank fees, and more. All taught by dedicated Wall Street professionals. The young moguls also take trips annually; this year to Italy!
I hope this article has helped you at least start to think about how we interact with money and the effect it has on your children. My kids got almost $200 for Christmas collectively. We’ll be using these concepts and I’m hoping they learn from them. ‘Every day, with every dollar, you decide to be rich poor or middle class’.
It does take a village. Leave your comments or suggestions below.