"Parents should introduce their kids to the concept of money when they're young — ideally before age 8, said Sam X Renick, creator of Sammy Rabbit, a financial education program for children. It's an integral part of life, so children need to understand its role..."
Earlier this year, Cameron Huddleston of Go Banking Rates addressed an important question - what are the most important things kids really need to know about money? READ ARTICLE
What do you think? What are the most important things kids really need to know about money? Here are the seven money concepts identified in the column:
The concept of money
The value of working for money
The importance of saving and sharing
The difference between wants and needs
How credit works
The benefits of investing, which includes understanding compound interest
The concept of net worth
I have written on several occasions, I believe the single most important concept to teach a child about money is to get in the habit of saving it. Based on my own personal experience I strongly agree with the quote below from to T.T. Munger. Learning to save money has multiple benefits. It teaches delayed gratification and discipline. It teaches goal setting and planning. It stresses preparation. It helps protect against poor spending choices. It builds confidence and esteem. This is why Sammy Rabbit shares with kids, "saving is a great habit!"
What do you think? What is the single most important concept to teach a child about money? Is it to: save money? work hard and earn money? budget? prioritize wants and needs? spend smart? understand credit? something else? We welcome your thoughts and suggestions on how to teach the concept!
QUOTES
“The habit of saving is itself an education; it fosters every virtue, teaches self-denial, cultivates the sense of order, trains to forethought, and so broadens the mind.” –T.T. Munger, Pioneering Research Scientist
"Don't save what is left after spending; spend what is left after saving" –Warren Buffett, Investor
“The average American only saves 6.5 percent of his or her income, which is barely keeping up with inflation. But you, dear #GIRLBOSS, should save 10 percent at the bare minimum. I know it’s a lot easier to talk about saving money than it is to actually save it. Here’s a tip: Treat your savings account like just another bill. It has to be paid every month, or there are consequences… If you’re tempted to buy something, just imagine that those new shoes were actually made out of crisp $ 20 bills. Do those $ 20 bills look good getting dirty on the sidewalk? No, they do not. That’s because money looks better in the bank than on your feet.” –Sophia Amoruso, Businesswoman, Founder - Nasty Gal
DEFINTIONS
Credit
A form of lending money backed by a promise to repay the money according to the agreed to terms
Investing
Commit money into a business, property, project or real estate with the expectation of achieving a future profit or gain
Needs
Good and services that are required for basic and safe living like food, water, shelter, health care
Net Worth
It is the difference between the assets an individual own and the liabilities the owe. It is a measure of what one is worth in financial terms. It is also an indicator of how much financial freedom and security a person possesses.
Save
To keep or store up for use at a later time.
Wants
Goods or services we wish for or desire but that are not necessary to a basic and safe living
Work
Mental or physical activity as a means of earning income; employment