Written by Maria Molina for CNN
Hard-earned money teaches you to live for today. It gives you the flexibility to enjoy the great things and buy the essentials, without having to worry about cash flow or even have credit cards. It teaches you to hunt down the good deals and make adjustments, when necessary, to your budget.
It teaches you how to stick to a plan, and allows you to build a financial future with confidence.
But if money itself isn’t so important, what other knowledge can we pass on to our children? More importantly, how can we share the wisdom and experience that has given us the confidence to achieve our dreams?
Money matters
The idea of passing on your financial knowledge may sound more like a kindergarten classroom than the fourth and fifth grade classroom at our school, but this is actually one of the greatest assets for building a successful life and future.
On average Americans have accumulated around $87,000 in debt after looking at all the money they’ve spent in the last five years. But with the help of five powerful strategies, we can help our children make the most of their hard-earned money.
1. Planning.
Once parents start having these conversations and keep them alive in their children’s minds, it’s important to continue to keep track of their progress. Taking the time to have a good look at their expenses is key for establishing habits that will help them work on their money over the years.
Start by tracking your kids’ expenses throughout the week, on a spreadsheet or whatever format best suits you. Paying attention to what they are spending on each item is one easy step to strengthen the habit of living within your means.
2. Saving.
At the same time that your children are starting to put the pieces together, a great savings strategy is to set up their own personal investment fund in their name. Instead of using their allowances or gaming the system, they can fund this fund so that they are earning money independently.
3. Spending.
As soon as your children are old enough to shop, monitor the quality and amount of products they purchase to see if they are working towards growing their wallets. Did they purchase school supplies? Can they afford to go out on the town? Either way, provide a fun and exciting environment where they can develop and grow their spending and saving skills.
4. Investing.
We all know that a financial education starts at home, so it makes sense to make it a little easier for children to invest and create a self-sustaining income. They can place their spare change into an investment account and get started.
5. Saving.
The rest of the time they can tap into their savings if they have extra money to play with. Perhaps they can take a family road trip — to Disney World if they are so inclined.
One thing that I do love to share with my kids — and for my daughter to see as she gets older — is the importance of everything we learn from the everyday experiences that we go through.
I never stop having conversations with my son on his choices as a man, so that he understands that, when we make a financial decision in the world, we are making choices based on our values.
Money helps us define our identity.
I hope that every child in this country will be taught to work hard and have a spirit of responsibility toward their finances.
Their money skills are invaluable to preparing them for a successful future and achieving their dreams. It is never too early or too late for a financial education.
Maria Molina, a Portuguese physician based in the United States, is the founder of Campia Xi8.org, a “digital camp” that is a part of a project run by the World Health Organization and the UNICEF called #UNTHETC.