Teach Them Early

Cathy on Facebook wants to know how early she should start teaching her kids about money. Dave thinks you should start teaching them as soon as they show interest and keep it age-appropriate.

QUESTION: Cathy on Facebook wants to know how early she should start teaching her kids about money. Dave thinks you should start teaching them as soon as they show interest and keep it age-appropriate.

ANSWER: You should start teaching your kids about money as early as you start teaching them about sex, which is the first time they show any interest and have any questions. Don’t over-answer questions. Keep it age-appropriate. The point is that this is a process. If you have one talk with your kids about sex, you’re going to have pregnant teenagers. Teaching kids about sex is an ongoing process throughout the entire time they grow up. It’s not a one-time thing. It’s just part of life. Money is the same deal—as soon as they start thinking about it or talking about it.

No, I don’t like allowance. Allowance is like welfare. We put our kids on commission. You work, you get paid; you don’t work, you don’t get paid. We had chores associated with certain dollars, and when you worked, you got those dollars. Some of that money was put in an envelope that said “Saving.” Some of that money was put in an envelope that said “Giving.” Some of that money was put in an envelope that said “Spending.” We taught them to do each wisely—saving, spending, and giving.

You teach them four major goals by the time they’re 10, or you’ve got a problem already when it comes to money. That’s giving, saving, spending, and work. They need to emotionally connect work to money. I meet 54-year-olds who have still not made that connection.