How do you teach a 5 year old about money? I try my best by using words like money, work, saving, affordable, and expensive when talking to my son Ashton. At 5, my son has a clear picture of why we work, what for (money), and what that earned money should be spent on (necessities like food).
When at the toy store, I explain to Ashton why I can’t afford one thing vs. a cheaper alternative. He knows that money is not free-flowing, that someone has to work hard and exchange time for it, and that there are consequences to spending and saving money.
I recently got a book called “The Richest Man in Babylon”. Ashton and I have been reading it every night, one chapter at a time.
What I like about this book is the interactivity and motivation it offers. You and your child can color pages, log the dates when you read the book, answer 1 question after each chapter, record your child’s saving habits, and finishing the book – you can award a certificate to your son for completing and learning about “The Basic Laws of Money”.
Currently we are on Chapter 4.
I wish someone taught me about money when I was younger, then I could have saved most of my allowance and made money work for me. It was only when I had Ashton that I self-studied personal finance topics like stocks, mutual funds, insurance, and different bank products.
It’s not rare to find fellow moms like me but then there are also others who are scared to learn more about investing. The common thinking is that investments are just for the rich. I am not rich, I swallowed my pride and handed P5,000 as my first investment a few years ago. Nowadays, anyone can invest just with P1,000.
The reason I self-studied personal finance is I am afraid to ask someone who will turn out to sell me products. If you want to do the same, check out Brighter Life Institute. This is a new free online resource about personal finance. It is by Sun Life Financial (where I invest) but it’s up to you where you want to put your money. The important thing is that the principles are universal.
https://www.youtube.com/watch?v=_RY2N9UoqHM
Above is one of the modules (lesson 2) from the Brighter Life Institute that talks about budgeting and saving for the future 🙂
Action points:
1. Find more ways to teach your children about money to increase their financial IQ
2. Equip yourself with personal finance knowledge, start investing, or start investing more
Remember that in investing, there is always no better time to start than today.
