Help me come up with discussion topics for my son

[rodi]

My son asked me if I could give him "formal classes" in money management. It came because I had a money talk radio show on in the car and he asked what a 401(k) was... I explained... then he started asking about college funds, and I started explaining 529s and other college savings plans. I was trying to explain to him about tax benefits.

Anyway - he's very interested - and I'm encouraging this interest. The plan is to have a one hour talk, each week...

I figured I'd start with the basics... The first week:
Spending. Keeping track of it, figuring out how to make wise choices, etc. Emphasis on LBYM and bank the rest.

2nd week is planned for investing, saving, compounding. He's good at math. I'll introduce inflation as well. I'll show how small investments, grow big over time.

3rd week we'll talk taxes. Federal, State, sales, property, car registration, etc... so he can see that taxes need to be planned for.

Any other topic ideas? In case I don't bore him too much in the first 3 weeks and he wants more... LOL

He's 13, almost 14 years old. He's good with math - so I plan on having him do the math, perhaps even graph things. He likes the topic, so he probably won't be as bored as most kids.

 

[braumeister]

How much does he have saved up so far?
You'll need to charge him 1% for the service.

 

[Walt34]

You'll need to charge him 1% for the service.

braumeister, you are an evil, evil man.

My issue was learning to stay out of stores. I guess now that also equates to either not signing up for E-mail ads or turning them off/blocking them asap to reduce temptation or learning to simply ignore them.

 

[Theseus]

Wow - I'm amazed by your son's interest in money management at the age of 13! When i was that age that topic wasn't even remotely near my radar screen.

But one subject I see your list might be expanded by is insurance, of all stripes. And at that age, somehow instilling a curiosity to observe and understand the implications of consumer habits. Being astute to the mistakes others have made is a lot less expensive education than having to make them on your own.

Good luck!

 

[Amethyst]

While you're teaching him to be smart about spending...find out if school has addressed the ways advertisers use human nature to get us to buy stuff we don't need (greed, fear [as in, "Do I smell bad?," vanity, desire to be like others, and of course, sex).

Our local junior high had a section on that for the 6th graders (the "sex" part was referred to as "using very attractive people to sell things"), so he may have heard about it already.

Good luck to both of you! It's fun talking with smart young folks.

Amethyst

 

[pjm-7]

As part of your "investing" class you could front him the money (real or play) to purchase a stock and or mutual fund for him to follow. For individual stocks look at the ones that can be purchased directly from the company and have dividend reinvestment plans.

As part of the LBYM you could teach him to shop and compare prices for the item, then you match the savings into his "investment" account. For example, if he wants a new pair of sneakers and he can find them on sale for $15 off at a particular store or with a coupon, you match his savings into the investment account (total invested $30).

 

[splitwdw]

You know your son best but was he just curious and a brief discussion is enough. I would have thought since you LBYM he would already understand a lot of the basics already.

 

[Throwdownmyaceinthehole]

I'd try to tie some typical small luxuries to something he wants to do. Example how many Starbucks/cell phones to pay for a ski trip or cruise or guitar, etc.or car comparisons, how much else you could buy with the difference between a used honda and a new BMW

 

[Meadbh]

rodi, it's wonderful that DS is interested. You might like to check out some existing educational programs on finance developed for young people. It could save you a lot of time hunting for resources.

http://www.fcac-acfc.gc.ca/Eng/resources/educationalPrograms/Pages/CityPDF-PDFZone.aspx

The City :: Login

Funny Money for high schools | Inspire Financial Learning

Teaching Financial Literacy To Teens: Introduction | Investopedia

 

[imoldernu]

What a great opportunity...
I had a similar situation several years ago, with my grandson, who is at IMSA now, but will go to college next fall.
We went on some long rides together through rural area near my home, and had many low keyed wandering discussions about different matters... school, society, the future, his peers, his hopes and anything that came to mind. Though I am not usually passive, in this case, what worked was to have silence, until he asked. To let the conversation drift until the the questions came up. Sometimes, to throw out a subject and wait to see if curiosity turned to interest, and then to work together to understand.
He has turned into a well rounded man, with a broad vision of his future which now looks to meld science and humanity, in the finest sense. Now fluent in Spanish and learning Chinese, his current thinking is international biochemistry.

I look at education as a matter of absorbing rather than force feeding knowledge. No... not for every child, but for those for whom learning is a positive experience, and not a chore. A two way conversation, and not a lecture.

So, no help with topics, but a "what worked for us...".

 

[LOL!]

Get him a free teenager's checking account [possibly joint] at your bank. You can pay his allowance by online transfers. He can use his debit/ATM card for all his transactions. He can learn to buy things from Amazon, pay for his movie tickets, his iTunes, his junk food, etc.

BTW, my teenage son knows he smells bad because his sister tells him that all the time.

 

[rodi]

rodi, it's wonderful that DS is interested. You might like to check out some existing educational programs on finance developed for young people. It could save you a lot of time hunting for resources.

The City: Program modules

The City :: Login

Funny Money for high schools | Inspire Financial Learning

Teaching Financial Literacy To Teens: Introduction | Investopedia

Excellent. Thanks.

 

[rodi]

I love the idea of insurance and of putting things in terms of impulse purchases (starbucks)... In our house - the kids always want $ to ride their bikes to the local donut shop, so that's what I'll use.

 

[EastWest Gal]

Two ideas:

1. Set a pretend amount of money where you and he choose investment vehicles such as Vanguard total stock market, a bond fund, a CD, or a regular savings account, and track what happens to that investment. He could easily follow 4 different vehicles on a weekly basis and see the differences over time. He would have to learn the terminology of finances and would get a better feel of it.

2. I think just watching a few of the ads for things like reverse mortgages and fast loans on TV and discussing what is wrong with these options.

BTW, checking accounts for minors are joint accounts. DH and DS closed their joint account when DS turned 18. All the money in the account (Christmas checks) had sat untouched, and was rolled into a CD and a small checking account.

 

[rodi]

He has a joint account (as does his younger brother). Our family rule is Christmas and Birthday money that comes in the form of a check gets deposited. Cash can be spent or put on the "bank of mom". (I keep a ledger for money earned for chores, then spent on video games, etc.) The kids know they have the account, but aren't super tuned in to how much is in them. They know they have a few hundred... In reality they were given big "birth" gifts and have a few thousand. We roll over the bulk of money to CDs every year... leaving about $100 accessible - in a joint account kind of way (needs cosign.)


I've explained that the bank account is for *long term* savings goals - like their first car or for college expenses. I've been stressing this since they were born.

 

[Walt34]

It is just amazing to me that a 13-going-on-14 year old would be even thinking about this stuff.

Way, way, more advanced than I was. I just wanted to learn to fly control line model airplanes and um, how do you talk to girls?

 

[Ticker]

Banks seem to prey on the young, and overdraft fees. atm fees, low balance fees, nsf fees all cost consumers dearly. if/when you open an account for your child, you should review all of the pitfalls of having a checking account.

the same goes for credit cards and their fees.

 

[Gumby]

If he is good with math, you might consider introducing some simple probability concepts. I would start with dice and the probability of rolling snake eyes, but you could go as far as his interest holds. That could lead into the lesson that gambling at the casino is for those who are math deficient, as well as the idea of the risk/reward trade-off inherent in all investing (i.e. black or red on the roulette wheel is less risky, but less rewarding than a single number bet; same with a mutual fund and a single stock).

When the young wife was teaching math at the alternative high school, she used the above, plus had her students calculate what the best cell phone plans and cable deals were. She taught them that they should know math to keep from getting ripped off. Another concept she introduced was compound interest and just how much they would pay to buy those jazzy sneakers on a credit card (making minimum payments) or to take out the new car loan.

 

[MooreBonds]

I figured I'd start with the basics... The first week:
Spending. Keeping track of it, figuring out how to make wise choices, etc. Emphasis on LBYM and bank the rest.

2nd week is planned for investing, saving, compounding. He's good at math. I'll introduce inflation as well. I'll show how small investments, grow big over time.

3rd week we'll talk taxes. Federal, State, sales, property, car registration, etc... so he can see that taxes need to be planned for.

Any other topic ideas? In case I don't bore him too much in the first 3 weeks and he wants more... LOL

I don't know where you had this planned (or if you did), but I don't see anything in there about DEBT.

credit cards, mortgage, car loans, student debt (federal and private), HELOC, Home Equity Loans, payday loans. What each one is, relative interest rates, why some are 'better' than others. What happens if you're late. This alone could easily be 2-3 talks for him to digest it.

In addition to the investing side, you have to show him why it is a bad idea to "just put stuff on a credit card and pay it off over time" (although you can drive that point home when showing what returns are reasonable in the stock market, vs what he would pay on consumer debt).

Another one (for later, perhaps right after the debt talk) is credit reports. You can show him yours as an example. Explain how the process works, what the score is, how there are different factors that affect the score.

 

[N02L84ER]

Something that my students found to be eye-opening was a budget exercise. First we made a list of items where they were currently spending their money, like movies, snacks, auto fuel, clothes, gifts, dating, etc. Next, they were given a list of typical household expenses (gas/heat, electric, home phone, internet, mortgage/rent, credit card, etc.) and told to ask their parents what the parents paid on average per month for the expenses. Then they were told to pick a couple of jobs/careers they were interested in pursuing and to look up the starting salaries and average salaries for the jobs/careers and determine how much extra money they would have each month for saving.

 

[sengsational]

You might get some ideas from here: Investment Education, Investing 101, Investment Basics, Investment Classroom, Learn to Invest | Morningstar

 

[Meadbh]

Something that my students found to be eye-opening was a budget exercise. First we made a list of items where they were currently spending their money, like movies, snacks, auto fuel, clothes, gifts, dating, etc. Next, they were given a list of typical household expenses (gas/heat, electric, home phone, internet, mortgage/rent, credit card, etc.) and told to ask their parents what the parents paid on average per month for the expenses. Then they were told to pick a couple of jobs/careers they were interested in pursuing and to look up the starting salaries and average salaries for the jobs/careers and determine how much extra money they would have each month for saving.

That would be a great exercise.

 

[LOL!]

Although he has a joint account, he needs an account he can use that is not off limits.

 

[FI by 2024]

Here are the lessons I have developed or plan to in the future:

Budgets 101
Debt reduction - different methods
The miracle of Compound interest
Credit cards: friend or foe?
Car buying
Figuring out the true cost of everything
Investing basics
Easy ways to save
Reducing expenses
Increasing income - simple side hustles
Making your money work for you
Prioritizing expenses
Insuring your life
Early retirement: How To
Top ten personal finance tips


Sent from my iPhone using Early Retirement Forum

 

[FUEGO]

I've started my nine year old down this path of financial exploration. Under the pretext of "here's a challenging math problem for you", I told her to develop a budget for her 4 years of college and then come up with a funding plan between now (age 9) and college graduation that will allow her to pay for her whole college.

Her guesses for college costs were way off (she assumed college tuition was $1,000 per year right after she asked "what's tuition? People pay to go to school?!?!"), but it started good discussions on budgeting and long term financial planning. She's kind of a math whiz, so this type of word problem with a lot of undefined values is a good challenge for her, too.

I've decided to let them in on our FI and early retirement and how our finances work. So we have the occasional random discussion on finances and investments already. I also picked up a few financy books from the Juvenile non-fiction section of the library and reverse psychology them into reading these books.