Money Lessons Today, Dividends Tomorrow

With curriculum standards getting tighter in schools, reading, writing and math take up most of the day.  There is no time left for extra lessons, such as personal finance.  How can we teach our kids these valuable, life lessons about money?  

We can start teaching our kids at an early age.  Start by teaching kids the difference between wants and needs, showing them how you earn money to pay the bills.  Set up savings accounts, save for specific short term goals and set up long term savings goals. Consider giving allowances as a way to manage money, not to be used as a source of reward or punishment.  

As children get older, you can introduce more financial principles, such as the stock market.  You can make a game of investing in companies that support their interests.  For example, if your child is interested in fashion, teach them how to find companies that make their favorite clothes.  Then they can watch the stock prices for a given period of time.  (You can get more information at www.stockmarketgame.org).

Teens should be able to learn to manage checking accounts, earn money and pay taxes.  They should learn to pace spending, and start saving more for their long-term goals.  This is an important base to have, before they go off to college, when managing money will become more difficult, yet more important.  

In college, students should work on establishing credit, with obtaining a credit card, managing student loan debts, and managing housing expenses.  This is also an age to start checking their credit reports for potential errors and to know what information is included.  Everyone can receive free personal reports through annualcreditreport.com.

It is important for young adults to learn to live within their means.  In this age of instant gratification, credit card debt is growing along with student loan debt.  This reliance on debt can turn into heavy baggage which will be difficult to handle.  As these young adults graduate and get into the work place. they should begin to accumulate three to six months of living expenses to meet emergencies.  They need to be aware of insurance basics, and should start investing.  They should start with looking into workplace retirement plans and how funds may be matched.  

We need to get our children to save today, so they will have dividends tomorrow.