Teaching Your Kids About Money

When I was 16 and had my first job at a fast food restaurant, I was responsible for paying my car insurance, my pager bill (yes, I am that old and it was the cool thing to do), and save a chunk of each paycheck. When I cashed my first paycheck, my mom came into my room with a stack of envelopes. We sat on my bed and talked about what to do with the money. We labeled the envelopes "Fun", "Gas Money", "Savings", "Insurance" and "Pager Bill". We then decided how much money needed to go into each envelope from each paycheck and wrote it on the envelope. I soon found myself having leftovers from some envelopes, and being so excited to stick the extra cash in the "Savings" envelope. Within months, one of my favorites things to do on a day off was to drive to the bank and deposit the extra cash. I loved saving money. I loved the pride that I felt and that feeling of accomplishment. 

Teaching children to be financially savvy at a young age can make a world of difference! As a kid, I had a piggy bank where I kept my sacred money stash. If I wanted a toy, I was expected to dig into my stash and spring for the toy. Needless to say, I didn't have very many toys, because I learned the value of money at such a young age. By the time I was 18, I had saved up $6,000. I joined the military, and soon after, was raking in a whopping $600 a month. I still managed to save $100 a month and pay all of my bills and have a fun life outside of work. This was all because of my parents teaching me how to manage money at a young age.



These healthy habits paid off as an adult. I am 33 years old and can probably retire by the time that I am 40 based entirely on savings and savvy spending. Now, don't get me wrong. I still have lots of fun hobbies, and enjoy splurging here and there. I have horses, I travel out of country every year, and have zero debt (besides my mortgage on my house). But unlike other people in their early 20's, I chose to save my money so I could later afford all of the great things that life had to offer, rather than use credit to buy it.

If I wanted something, I would find a way to make the money to pay for it. Sell old books on ebay, clean out my closet for a yard sale, or take on a part-time gig.

Another trick that my mom taught me dealt with credit. At 16, I got my first credit card with a  $200 limit.  I would use it for gas and fun, then pay it off every month. So I was building interest on my money as it sat in savings, then I would use that money to pay off my card each month, never incurring monthly fees. This allowed me to build credit and continue to develop good financial habits. Now, I still do the same thing, but I have rewards cards. I get free plane tickets, or cash back just for spending money and paying it off every month all the while, gaining interest on the money sitting in th ebank that will be used to pay the bill.

One last tip: Pay your bills a few days before they are due. Don't pay them early, that will cause you to lose out on interest. Although interest rates aren't phenomenal, its still free money- like finding a quarter or a dollar on the street.