Before I became a mom, I figured I’d have plenty of opportunities to drop some knowledge on my future children. Now that I’m the mother of three, I’m realizing that my little ones have plenty to teach me as well.
Since she’s the oldest, my 6-year-old, Serena, has had the most time to impart her wisdom. Here are six money lessons I’ve learned from her…so far.
1. Learning is fun.
We tend to think of finances as complex and boring. And if you’re an adult who isn’t well-versed in the subject (which is most people), it may seem intimidating to learn now. But learning can be fun! When our town held a “finance” assembly for Kindergarteners, first and second graders (let that sink in for a minute), the kids were into it.
The presenter—Brad Zupp, who was formerly, though not simultaneously, a circus performer and financial planner—mixed in money lessons with magic tricks, juggling and fun visuals to make it easy to understand. For example, to teach budgeting, he never used the “B” word. Rather, he used big posters of expenses with needs—a house, a way to get to work and healthy food—and wants, like a vacation, new phone or video game console. He then spun plates in front of each poster, telling the kids to let him know when they wobbled.
The kids hooted and hollered, telling him, as he was trying to get a plate spinning for the video game console, that he needed to steady the house plate. It perfectly captured how difficult it can be to balance all your financial responsibilities. Even a month later, my daughter remembers the lesson he intended with that display: “Needs first, then wants.”
You may not need spinning plates to hold your attention, but we all have some way of learning that suits us best. Maybe you absorb information best when it’s delivered in relevant, well-researched articles (wink wink). Maybe you’d do better with a more structured approach. Figure out what works best for you.
2. Budgeting doesn’t have to be complicated.
Last year, Serena’s school had a holiday shop fundraiser, transforming the gym into a makeshift mall, selling gifts to students shopping for family and friends. The organization that provided the products sent home envelopes encouraging families to list who the child should buy gifts for, along with a per-person budget.
I volunteered to help with the event, and was surprised to find that these kids had zero problem sticking to their budgets. Some even enjoyed figuring out what they could exchange to lower costs.
The best part? Budgeting can be just that simple, especially when you think about tradeoffs as just a way to get more of what you want.
3. Save today, savor tomorrow.
Serena’s a natural saver. While eating pancakes one Sunday, I watched her pick out the chocolate chips and set them aside, building one big chocolate ball. “Oh, I just like to do that,” she said when I asked what she was doing. “So I can save the best for last.”
Not strictly a lesson in finance, but Serena clearly understands delayed gratification. She could’ve eaten a little chocolate in every bite, but she chose to wait for the compounded deliciousness. The same attitude with your money can help anyone build a fortune. Put a little aside whenever you can, and watch your savings grow over time.
4. You always need cash on hand.
My daughter has two purses filled with all the coins and dollars she’s saved (plus a couple small toys). Whenever she hears me say I need cash, she’s ready to give me a loan.
We should all have an emergency fund like Serena, and exponentially moreso. The standard advice is to have enough to cover three to six months’ worth of expenses. If that’s too big a goal now, just aim for $1,000 to start—likely enough to cover run-of-the-mill emergencies like surprise repairs or a trip to urgent care—then work up from there.
5. Sharing is caring.
Serena isn’t just quick to offer her mad money when someone needs it, but she’s happy raising money through school fundraisers and other events. Helping make others happy makes her happy.
I try to mimic her sincere generosity with my own giving. Unlike Serena, I have many other competing needs and wants, which means I can only afford to share if I budget accordingly. On top of annual contributions to certain organizations, I’ve made room in my budget for extra giving in emergencies and to the random causes my friends support. And because I always want to do more, I give in non-financial ways, too, like donating clothes, household items and even my hair.
6. The best things are free.
I try hard to keep my kids entertained and active. But every so often, when I ask what they want to do, Serena requests a pajama day, where we just hang out at home together. Sure, having a home with heat and food and beds costs money, even if she doesn’t realize it. But the lesson I get from her in these moments is that sometimes, what we’re already doing is enough and extras are just that.