How Early Should You Start Educating Your Children About Money? – Episode 321

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[00:01] Welcome to the Prosperity Podcast. In this episode of the Prosperity Podcast, we’re going to be talking about educating your children and specifically how early you should start educating your children about money. And I am so interested in hearing your perspective, Kim. Well, this is a fun subject. And I think like so many things as early and as often as possible is my answer. So it’s so fun. Actually, we just spent the weekend with a three-year-old. And I wasn’t privy to any financial discussions, but they certainly could have been had. And so, as an example, the grocery store, I think, is a fabulous place just to start educating children about money as literally as old as they are able to talk because,

[00:56] as we all know, a child at a grocery store is going to start figuring out that there are things on the shelves that, when they get put in the cart, become theirs. The idea of delayed gratification can be started on right away. And it’s as simple as communicating with them about this candy bar versus this toy, as an example. Like if somebody has a candy bar, that’s a right away treat. If somebody has a toy, that is a treat that lasts a little bit longer. I think also it’s super fun just to start to deal with what one dollar, like literally a paper dollar, is versus dimes and nickels and pennies. And of course, we all know that a young child is going to decide that a nickel is more fun to have, more capable because it’s physically bigger than a tiny, thin little dime.

[01:51] Of course, depending on their color preference, they might even like pennies better. These are all things that, just basic math. Of course, one dollar equals this many dimes, this many nickels, this many pennies, etc. And quarters, of course, and that can be part of the discussion. But the now and later aspect is even more fun. And then that can be elaborated on really endlessly. I think any time the subject comes up of money, our families can do a better job of having conversations at all kinds of appropriate levels with our children. I think this old style, money is a taboo, we don’t talk about it in this family, that has got to go down the drain. And so if you are starting conversations at, say, three or four,

[02:44] then it becomes more normal to step up at, say, five or six when it might be appropriate to talk about what generates money and how work is a valuable thing and to help that child start to see that there are basic things that we do in our household that are necessary for the running of a household, like maybe taking out the garbage. And then there are other special things that can be done work-wise that get a little bit of extra money because they’re extra work, like maybe weeding in the garden or something. Each family is going to decide what is part of running the household in quotes versus extra work. And of course, depending on whether you have a farm, it varies. And yet there are all kinds of creative ways to

[03:33] identify helping a child start to put the connection between work and money. We’ve got a 17-year-old in our extended family, and she came to our farm every day this summer to work in the hot sun doing tough jobs. And she was so happy to do it because she started immediately correlate the extra effort to dollars that were drastically larger than she had ever dealt with in the past. And then it was great because her parents helped her see, okay, now that you’ve earned that money, when you go to Starbucks with your friends, you get to spend your money. Well, guess what? She chose very different drinks at Starbucks when it was her own money that she was spending rather than her parents’ money. So all along the way, there are valuable places to talk about money, to educate about money,

[04:32] and to be very conscious of the words that we use around money. And so this area of the mindset of money is, I think, a critical thing to teach in addition to the facts and the math and the trade-off of money. Yeah. When you mentioned the early mindset of it, it’s stated in several books that I’ve read about finance, and I know, Jan, reading books about finance. But the psychology piece of it, we have so many things that are developed and wired in our brains about money and about the way that our parents talked about it. And so often you can say, oh yeah, you know, it’s hard to earn money, or, oh, you shouldn’t spend it on this, or whatever it may be. And I think we, as parents, and as people that are around younger people, need to be more responsible with the words that

[05:29] we’re saying and find ways that we can share a prosperous language and mindset as much as possible. So how have you done that with the children you’ve been around? I think one of the most important word shifts that I actually picked up from Robert Kiyosaki long ago is the changing out of I can’t afford it to how can I afford it or how could I afford it. So as an example, the younger of this family, so we had the 17-year-old girl and there’s a 14-year-old boy, and he is into cars, which is awesome. A lot of kids aren’t these days, but he is. And his father is skilled at fixing cars. And so looking ahead a couple of years, right, before he can even drive a car, he is conscious of getting cars,

[06:22] fixing cars, selling cars, and then upgrading. And so here’s a situation where he can’t afford the car that he might want, but he could buy a lesser car, fix it and sell it, and then leverage that up into the next phase and the next phase. Well, he’s thinking that way because his father helped him see the potential of that kind of thought as opposed to just, oh, well, I could never afford that, cross it off the list, down the road I go. And so it is so important that we really watch our language around money. And this is, I think, a fun thing for families because it causes the adults to have some perspective around their own thoughts around money. And I want to share a book of a parent and son co-authorship

[07:15] that is valuable in this space. And it’s called Even If Your Toes Turn Purple. Are you familiar with this? It’s by Rich Christensen. No, I’m not. I’m actually writing it down. That sounds interesting. Yeah, it’s a good book, Even If Your Toes Turn Purple by Rich Christensen and his son, and I’m sorry, I can’t remember the son’s name right now. So the parents, Rich and his wife, chose to have a very entrepreneurial thought process around money and to teach their children an entrepreneurial perspective around money, which basically says the same thing that I said about Robert’s thinking, which is to switch your mindset around from I can’t afford it to how can I afford it. And clearly for children, how can I afford it then leads into work

[08:05] opportunities where they might do work for money that then enable them to afford it. And yes, I know it’s tough in bigger cities because of the child labor laws, et cetera, et cetera, but there are still solutions if your family is committed enough to this to find ways around it. And so the ability for our mindset and our words, so it starts in our thinking, of course, and then is translated into our words to then impact how we handle the physical aspect of money is so, so important. And to be conscious of that prosperity mindset versus the poverty mindset that is so easy to adopt without even thinking about it, just because it’s the poverty mindset and language around money tend to be so prevalent

[08:52] in our society. Those types of mindsets and that shift in thought, and then of course, correspondingly in language are critical at both the adult level and at the child level. And by adult, you know, I could mean a 50 year old, an 80 year old, who knows, you know, that’s the beauty of mindset shift. It doesn’t matter how old you are, there’s still good mindset shifts that can occur. The beauty is that this can happen very, very quickly. I mean, literally, just as soon as you become aware of this, you can start to tune into how are you thinking about money and how are you speaking about money and what is the impact that you are having not only on yourselves, but the people around you in your close family and then in your extended family and any of the younger people

[09:42] that you may be responsible for, et cetera. You know, it’s wonderful that we’re having this conversation because a lot of these topics that we have in the podcast are for the listeners and listeners only. This is a topic that’s more of what we call a legacy. So we can be aware of our language now and how we’re going to be helping and nurturing and teaching those that are coming up. And so this is a legacy, a generational type of thing. And I’ve noticed in the books that you’ve written in the past, they cover a variety of different subjects. You’ve got busting the real estate investment lies and you’ve got learning how to live your life insurance. And the latest you have is perpetual wealth. And it’s really talking

[10:30] about the legacy piece. Is there a reason why you decided to go that route? Well, it is something that I think so many people want to leave a legacy and they think that the only legacy that’s available to be left is money. And that’s not true at all. A most important legacy is mindset and an equally important legacy is education. And a third and equal important legacy is choosing your words carefully and the way that you handle things. I mean, all of those are so important in terms of legacy. And so in the perpetual wealth book that you’re identifying, again, we’ll put a link to that in the show notes, are first of all, a lot of talk around the idea of legacies that you can leave that are not

[11:17] always terribly based. And then second of all, in that book are 13 specific strategies for raising financially responsible children. And it is so amazing that so many families don’t even have this as a goal. It’s just something they’re either ignoring or maybe they’re purposely avoiding it because they don’t feel like they can handle on it themselves. And so this is one of those things that it’s time to be humble. If you feel like you need some work in this area and you’ve got teenagers, oh my gosh, do the work together. Learn, read, study, apply math and find ways to shift the conversation around money for your family. I can’t think of a better legacy to leave a child than not only some knowledge around money, but also some knowledge around the shifting of mindset

[12:09] and language and how important that is too. Those are beautiful legacies to leave and then can be carried on into grandchildren and even great grandchildren as you work with those younger generations as well. Absolutely. And I think it would be surprising that if you’re working on it with your teenagers, they may be just as excited and they may share you insights with you that are going to continue to help out. So it’s going to be a win-win, as you mentioned. Yes. Just being a lifelong learner and having the humility of mindset to acknowledge when you need to learn about something and to get help and to involve others is a fabulous point of view and perspective to go forward with. Wonderful summary to that episode. And we’ll make sure to put a link to the Perpetual Wealth

[12:59] book inside of the show notes so it’s easy for you to just click on that. And then for all of you listeners, if you happen to be new to the podcast, we have listeners in all 50 states and actually in several countries throughout the world. So if you’re new to the podcast, make sure you are subscribed so you get a new episode every single week. And we’re sharing topics that are around prosperity and really helping you, your family and those around you become more prosperous with your thinking, your finances, and other aspects of your life. So final words before we sign off, Kim? Well, just grateful as always. And yes, we love our worldwide listeners. And the fun thing about the Perpetual Wealth book is there was not a lot of specific to U.S.

[13:43] tax law or product mention other than the whole life insurance, which is certainly available in some countries, but not others. So there’s lots of good there for our worldwide audience as well. All right. Well, perfect. Thank you so much, Kim. And thank you listeners for being with us on another episode. Thank you for listening to the Prosperity Podcast. To take control of your money and have it work for you, visit us at partnersforprosperity.com. If you liked this episode, make sure you subscribe and leave a review.