Getting a Kid to See the Light

[Meadbh]

I like the camp idea. Doing is better than seeing, hearing and being lectured.

Another idea for Al: take the teens to volunteer at the local homeless shelter.

Meadbh

 

[justin]

First National Bank of Dad - by David Owen.

Quick read - may give some insight on how to get your kids interested in savings and investing, including a discussion of the approach the author took with enough details to implement the approach. Can't say that I agree with everything he wrote, but it gave some good ideas.

My approach might be to get the kids to understand savings by letting them learn to save for a big purchase (Xbox 360, new bike, new video game, whatever) instead of just buying it. This approach might require you to give an allowance. This approach wouldn't work in Al's case, since he isn't the kids' parent and doesn't control financial and money issues.

Start a bank account for them? Put in $25 or $50 at christmas and birthdays and let them watch it grow. Tell them it only takes X years for the money to double and you don't have to do anything, it's like magic! There is such a thing as a money tree.

 

[brewer12345]

Start a bank account for them?  Put in $25 or $50 at christmas and birthdays and let them watch it grow.  Tell them it only takes X years for the money to double and you don't have to do anything, it's like magic!  There is such a thing as a money tree.

Yeah, my older daughter already has a custodial account with a couple thousand bucks in it. I plan to toss a couple thousand into each kids account every year, assuming fat bonuses.

 

[Nords]

First National Bank of Dad - by David Owen.

Absolutely the best book for parents to teach their kids about money. He also explains why kids think that parents are crazy.

A great book for the kids (especially read-along) is "If You Made A Million".

 

[Brat]

Each of the kids had a 'chore board' with a $ value attached to the chore ($0.10, $0.25).  If you didn't complete your week's chores you lost it all.  At the beginning of the week they could trade - negotiations like crazy (and sometimes swaps made under the table).  They had a very low allowance, chore earnings were important.  The money was theirs but $0.25/wk went to charity.

I established college accounts for each kid.  When each were in the 6th grade I showed them what had been accumulated and offered a menu of suitable investment options with return on investment information.  The son put all of his in Magellan Fund (when Lynch was running the show), daughter split hers between savings bonds and Magellan.  The boy checked his investments at least weekly, the girl checked once a year only asking if Lynch was still the best available.

Their personal risk profiles have been consistent for 20 years.  The son has a business, the daughter is a Controller.

 

[TromboneAl]

Well, I presented it to the kids, but it was seen as a very ho hum thing. Maybe it will get through to them some day.

Big culture shock visiting this house with three old almost empty refrigerators running, lights (no fluorescents) on all the time. I asked what the electric bill was and got "I don't know -- is that something that people generally know?"

I'm being good and not saying anything.

 

[SecondCor521]

The one thing that seemed to get through to my oldest was my snowball analogy.

Anyway, the analogy is that you start at the top of a big snowy hill with a little snowball. You drop the snowball and it starts rolling down the hill. As it rolls down the hill it picks up more snow, which makes the snowball go faster and faster. Eventually, that snowball has become so big and is going so fast that you can scrape off some of the snow as it rolls along and it will keep going, providing you with free snow forever.

I think the reason it worked is because he has an intuitive understanding about snowballs, gravity, and momentum and can picture it in his mind. Then he can transfer that intuition over to money, bank accounts, interest, etc.

2Cor521

 

[justin]

Analogies seem like an apt solution. Take a fruit tree. It starts with a seed. You plant it and over time tend to it, care for it, prune it, etc. Eventually, after a number of years of effort, it starts to yield fruit. Slowly at first, and then increasingly as it gets more mature. Get the kids to plant those seeds and tend to them.

 

[Siv]

I guess I can be one of the kid you're talking about and I'm in 30's. The company pays for all housing expense and it's in chinese so I usually bring the bills to the office. It's been 5 years, I'm starting to get curious and being bad in memorizing prices after a month, I seem to not able to remember. But, we do use things sensibly, no lights at night, AC off when we're out. I'm particularly interested in global warming and yes, it's getting hotter here in china. Oh, our electricity bill is about $50-$60.

 

[Scrooge]

Financially-responsible parents are trying to teach their kids one thing, while the media and advertisers are teaching them exactly the opposite by showing a constant stream of conspicuous consumption.

Well, teaching children to see through advertising is an integral part of teaching critical thinking skills, which would include the ability to analyze what the media, entertainers, etc are telling you. If they don't develop these skills, they'll probably have bigger problems than "failure to ER"

 

[Andy]

Financially-responsible parents are trying to teach their kids one thing, while the media and advertisers are teaching them exactly the opposite by showing a constant stream of conspicuous consumption

And add that most of their friends and their parents are going right along with the media..... :