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Home › Articles › Children and Finance › Down the Same Path

Down the Same Path

Is Your Child Destined for Financial Ruin?

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  • Give
  • Invest
  • Save
  • Spend wisely

Start your kids off to financial security using Mackey's concepts from Money Mama & The Three Little Pigs:

1. Talk to your children about money in a non-threatening way. Open the conversation and ask them what they think of money, what it does, its uses and what it is good for.

2. Explain to your children that financial fitness is as important as physical fitness. Mackey uses the 10/10/10/70 concept. Children should give away 10 percent of their earnings, save 10 percent, invest 10 percent and spend the remaining 70 percent wisely. "When you teach a child to give, they learn compassion," Mackey says. "When they understand investing and saving, they can have control over their future. When they experience living beneath their means, they lean how to make choices in life and become responsible."

3. Open a savings account for your children so they can create positive habits of saving long-term and watch their money grow and compound.

4. Pay them an allowance or give them extra chores so they can practice the 10/10/10/70 concept and understand how you receive payment for services rendered. Allow them to earn money so they can value what they have earned.

5. Always have them spend their own money on the items they want and need. Nothing better than when a child says, "But I don't want to waste my money!" Children will not spend their money nearly as fast as they will spend your money.

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