Kids vs Money
There is the general feeling that kids don’t learn about money at school, right? But, that is not the end of the world because we understand that as their parents, aunts, uncles, grandparents and friends we have the knowledge to teach them, yes? After all, we taught them to do up their shoe laces and cross the road and they can do that fine. But if our knowledge of personal finance means we are currently living our entire lives being bad with money then what exactly are we going to teach our kids?
Last weekend gave me the opportunity to hopefully teach my daughter a thing or two about the right way to be good with money. It is probably pretty obvious to you all that I am someone who openly discusses money related things. The price of the groceries, what we earned last week etc is often talked about at the dinner table. But she really has little appreciation of how to make money. In her eyes she sees her Dad sitting at his computer clicking a mouse a lot (he is a graphic designer, there is endless clicking) and when I work I waft off to an office somewhere doing lord knows what.
Recently I thought that my endless nagging of “tidy your room” was having an impact when she came out with armfuls of clothes that she no longer needed. Success! Nope, nothing to do with me. We had all watched The Minimalist a few weeks back and THAT is what inspired her, not me. No worries, it takes a community to raise a child so I’m just happy with the outcome i.e. moving stuff on.
Normally we would hand things we no longer need to a local charity shop or to friends but this time I instead offered her three choices:
- Do you want to donate it to the SPCA?
- Do you want to give it to friends?
- Do you want to sell it and make some money?
She was excited to have a go at selling it.
Our town has a Saturday market over the summer so I booked a spot for $10. Anything you do is better when your friends are there, so we asked two mates to join us. With the help of their parents they each filled up a few boxes with good quality stuff they no longer needed and with a picnic packed we headed to the market.
They were brilliant at helping with the setup and as they all sat on their deck chairs behind their tables of wares the excitement was contagious. And when THE FIRST PERSON approached they were so excited and whispering (very loudly) amongst themselves “she is coming to our stand!!!”. Then when ‘she’ arrived they were mute. It took a bit of prompting from me to get them to actually SPEAK to their potential customers and after a while they got the hang of that too. And when they actually sold something they fell upon the money like a pack of hungry wolves. It took a bit more teaching to get them to actually say thank you and hold back their excitement until the person had walked away. As for me, I mostly just hovered in the background and chatted to the people I knew who were passing.
Each were selling their own things so there was a bit of record keeping involved to note down who sold what. My daughter is a budding magician so she slipped in a magic show every 20 minutes as well. The busking was worth it and contributed to her total. She paid her able assistant a little from each show (I let them work that part out). Although this was a really small market pretty soon there were enough people wandering by and stopping to buy and the money was rolling in. They were delighted. The cash box was dropped on the ground not once but three times in their excitement to count the takings. It was a REAL cash box too and they could separate the coins into their own denominations. OH MY!
I thought they would last half an hour, spend all their earnings on lollies and then leave me to it while they ran off to the playground. But no sir ee, they not only stayed, but they stayed fully engaged for four hours. They loved it. They did visit other stalls for a quick look but only spent $2 - $3 each. At the end they had to do a bit more math to work out who earned what.
- Little Miss Happy Saver made $50
- Her girlfriend $60
- Her boy (who is a) friend $157 (he sold two bikes and a kayak! Note for next time: sell big things)
I got to keep my $80 float less the $10 fee for the stand. I thought about deducting it from their earnings, thus giving a lesson on expenses but couldn’t bring myself to rain on their parade!
We donated the remaining items to the SPCA and when we came home we talked about what to do with the money. She wanted to keep $15 out for spending and save $35. I was pushing for $45. We talked it through and agreed she should save $40. That is still an 80% saving rate. Long may this percentage continue. A week later and she has only spent $3 on ME; chocolates for Valentine's day. Awwwww.
I asked her girlfriend what she would do with the money. She was needing a device for school and knew it was going to be $80. She was SO PROUD of herself that she could contribute $60 towards it. As was her Mum! It was a great result.
And the young fella? His response was “save it all”. I checked in with him today and he has not spent a cent!
I asked Little Miss Happy Saver over dinner last night what the best bit about the market was? “Making money” was the answer. I thought she might regret getting rid of some stuff because she is such a hoarder and I get in huge trouble if I throw out the tiniest thing e.g. a marble that apparently had sentimental value! Really? But no, she was not missing any of it. I was pleased to see she could let go of things. And she could not deny that she had a great time with her mates too.
Next is to show her (again) that the $40 she is saving is no use to her sitting in her money box. We have talked about interest and discussed that it needs to go into a savings account. But kids are so visual and she much prefers getting it out to touch and hold. So, I’ve decided to post to her mailbox which is outside her room (of course!) a monthly update, much like you and I would receive a bank statement in the post. That way she can see that when she lets me invest her money for her it is actually making more money.
I should point out that when I talk to her about all this she is rolling her eyes, changing the subject and generally wanting to escape as soon as possible. Tough luck sista is my response! Some things are worth discussing and learning about. Just like maths; that is another bone of contention.
So, at the end of each month she is going to receive her very own investment update - as compiled by Mum! It will have enough information for her to get a picture of what she actually has and month by month she can watch it grow, or reduce. I’m really looking forward to the conversations it might generate and if it encourages her to more readily hand me the contents of her savings piggy bank to invest. Wish me luck with that! And another incredibly important point is to make her not focus on how much she has but to understand it takes a lot of time and effort to make money. Hopefully by doing this she will learn to be good with money and use it in the right way for the rest of her life.
A good friend made the following comment and it really resonated with me:
Don't let your money rule you, master your finances and love life
Too deep for a nine year old? Time will tell.
I would love to hear your tips and tricks for teaching little people about money. Please share your tips and tricks in the comments section or flick me an email.
P.S. I’m well aware of Clever Kash from ASB. It is a great concept but the barriers to entry are too high. I would have to open an account, plus one for my daughter and I would need to then deposit a salary into it each month. I don’t want to change banks in order to chase a kids money box. So, using a simple template and an experienced husband who happens to be a designer I’m going about it my way.