7 Ways to Raise Money-Wise Kids

Parents want their children to grow up with wisdom, integrity, and personal fulfillment. One way to achieve that goal is to start offering financial lessons early on in life.

At 8 years old, Mini Wise Money commands a stronger grasp of personal finance than I had in my late 20s. I feel lucky in this respect, as it’s every mother’s hope for her child to surpass her in wisdom, integrity, and life fulfillment.

I feel comfortable saying that my sentiments as a parent are representative of our society at large. As mothers and fathers, we strive to provide the best for our kids and we hope that they will develop a strong work ethic, commitment to charity, and resourcefulness.

While MWM taught me to not be “scared of monies” and not to be enslaved by material possessions (perhaps the most important lessons in personal finance), I have successfully educated MWM on the more technical and practical aspects of money.

This post explains the various ways I have taught Mini Wise Money to become money wise.

1. MWM goes to work with me.

As an infant, MWM sat in a front carrier when I taught Berkeley undergraduate students. As soon as MWM could hold a crayon and sit up on her own, she drew and scribbled next to me while I tutored students across the country on Skype. As a compassionate toddler, MWM eagerly helped with squirting water into the mouth of a cerebral palsy patient that I cared for. MWM brought baby wipes when I was changing this wheelchair-bound patient’s diaper.

2. MWM likes to listens to investment books.

Her dad reads the books to her with an animated voice at the dining room table. While MWM loves the scene of “feeding frenzy” described in Liar’s Poker, MWM also learns the importance of putting her money to work by investing.

3. MWM is involved in monetary decision making.

MWM has developed a strong sense of what “value” is. She understands that value is neither an isolated cheap, discounted price nor a high quality/highly desired item. MWM considers both the price and what she gets out of the purchase. For example, she bought a $20 pair of earrings that she really liked instead of paying $10 for 10 pairs of earrings that she thought were only “so-so.”

Kindergarten Graduation.

4. I share my money decision and milestones with MWM.

MWM knew when I paid off my student loans and how I did it. (I have gotten free haircuts from MWM since she was 2-and-a-half years old. I don’t go shopping and I do extra work after coming home from the hospital.) MWM knew why I chose to fund her 529 college savings account rather than refinancing our home to a 15-year fixed and lower interest rate.

5. MWM learns she has plenty by giving.

MWM went through a phase when she had tremendous sympathy for my indebtedness and lack of savings. In her words, “Mommy, you are the hardest working, poorest person I know. Poor mommy.” I’m glad that phase is mostly over, as it is neither healthy nor productive to throw yourself or your mom a pity party.

Together, MWM and I decided to sponsor a child, Mariela, in El Salvador on the eve of Thanksgiving 2014, realizing how much they indeed have compared to the rest of the world. MWM and I agreed to spend a little less on ourselves and pay $38 per month to provide Mariela with everything she needs: education, healthcare, food, and access to church.

MWM says, “It’s funny how I feel like I have more when I share my money with Mariela… I thought I’d definitely have less, but I feel like I have more.”

MWM also is very generous with family members; she makes offers like, “Mommy I will buy you a pair of new tennis shoes. Yours have holes on the sides and a lot of sand gets in when we walk Lola (our rescued dog).”

6. MWM knows and often practices delayed gratification.

Since MWM started banking at Mommy’s bank, which offers 10% annual interest rate since 2013, MWM has only spent 5% of all her deposits, including gift/holiday money and the proceeds from her artwork sales and dog walking business. MWM says, “If I don’t spend my money now and let it grow, I will get more for college and buying a house when I’m older.”

7. MWM values experiences more than material objects.

I immediately start MWM in lessons on any topic that piques her interest—horseback riding, gymnastics, circus, oil-painting, piano, theater, singing, and voice training. However, I ask MWM to think hard about the opportunity costs of purchasing “stuff” rather than experiences.

MWM knows that what matters in life are held in two places, her heart and her head.

While anyone can steal her platinum necklace (it was a gift, she and I would have put the equivalent cash into index funds), no one can take away the knowledge MWM has learned and the love she’s given and received.

MWM and I are partners in crime and each other’s best copilot. When it comes to money matters, my daughter and I learn together and hold each other accountable in this aspect of our lives, and in all others.

MWM had said once, “Mommy, you won’t be wearing shoes with holes if you didn’t have me. I’m expensive,” I told her I would not trade the whole world’s treasures for her, the little apple of my eye.