Recently, while dropping my 4-year-old twins off at preschool, my son Michael clenched my hand, saying he didn’t want me to leave. When I told him that I had to go to work, he quickly changed his tactic, this time asking me why I was going to work. Recognizing that he was employing a time-delaying technique that all kids master at a very young age, I quickly fired back the answer that I thought would stump him: “Well, I need to go to work because I need to make money so that I can buy you toys.” My argument proved to be bulletproof. He let me go, but later that day he did inquire if I had bought him a toy, since I had gone to work and made money.
Adults often answer kids’ random questions without being strategic or deliberate about their responses, and I realized that I may have accidentally educated my 4-year-old about money – to earn it, you must work for it. Frankly, I’m happy about it. If this is truly the first money lesson he remembers, I think we’re on the right track.
As Senior Vice President at California Bank & Trust, I have the privilege of working with business owners on various topics ranging from how to manage their business cash flow cycle to how to manage cash. Many of my clients share with me how great it would have been to start learning more about money at a younger age. From the lessons I’ve gathered, here are just a couple of fundamental things about money that I’m trying to pass on to my children:
• Start saving early. As easy as this sounds, it may be one of the hardest things for kids and adults alike to do. After all, the urge to buy things with our money is often much stronger than thinking about the future rewards of saving it. To change this, we need to transform saving money into a fun game for kids. My wife and I recently bought our twins little piggy banks, which they named Oink and Porky, and every Friday we give them some coins to put in their piggy banks. The goal is to fill Oink and Porky up, which I know is a silly game, but I also know that for my kids, saving money just became fun.
• As important as it is to save money, it’s equally important to learn about giving it away. This may sound contrary to the first point I made, but I want my kids to learn early on that in addition to buying things, money can also be used to help others in need. For example, having a child buy a toy with their own money for a child in need can be a powerful lesson in helping the less fortunate.
Finally, this famous quote sums it up perfectly: “It’s not how much you have, but what you do with what you have.”
The sooner parents start taking advantage of everyday teachable money moments, the better off our kids will be. Parents are the number one influence on their children’s financial behavior, so it’s up to us to raise a generation of mindful consumers, investors, savers, and givers.
Rocky Bandzeladze is Senior Vice President, Greater Southern California Division at California Bank & Trust