12 Ways to Make Your Kids Financially Savvy
By JONATHAN CLEMENTS
December 17, 2007; Page R1
Ten years after I am dead and gone, I suspect only two people will give much thought to me, and their names are Henry and Hannah.
They’re my legacy, so I hope they thrive — and I sure hope they remember me fondly.
Henry and Hannah are, of course, my children, now ages 15 and 19, respectively. Like any parent, I spend a lot of time thinking about my kids, including how I can best help them financially.
This isn’t simply about coughing up dollars and cents, though the sums involved have been frighteningly large. Rather, what it’s really about is passing along values.
Yes, I want my kids to be financially successful. But mostly, I want them to be competent, contented managers of their own money, so they don’t spend their lives agonizing over their finances and dogged by foolish mistakes.
I am not claiming to have the road map for every parent. We all have different values, different incomes and strong ideas about how best to raise children — and you will likely scoff at some of the things I’ve done. With that caveat, here are a dozen ways I have endeavored to help my kids financially.
1. WAITING UNTIL LATER
If children are to grow up to be successful savers and investors, they need to learn two key skills: How to delay gratification and how to take risks prudently. The first is easily the most important.
Indeed, the self-control needed to delay gratification is associated not only with good saving habits, but also with things like succeeding in school and coping better with frustration and stress.
Yet this isn’t an easy skill to teach. Henry and Hannah grew up spending their parents’ cash, so they didn’t have much incentive to curb their desires. My response? Make them feel like they’re spending their own money.
One of my early tricks was the soda game, which I learned about from a reader. When my children were young and we went to restaurants, I would give them a choice: They could have a soda or they could have $1.
Henry and Hannah ended up drinking a lot of water.
[Continue: The Wall Street Journal]
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