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Boost Your Kid's Money IQ with a Simple Spreadsheet

Sample Virtual Family Bank Spreadsheet

Let’s face it. Your kid’s piggy bank isn’t cutting it any more.

Sure, it was a fine first introduction to the most rudimentary concepts of money, but your kid is a smart cookie. Basic lessons learned.

So when are you going to take your kid’s money IQ to the next level? Your youngster is perfectly capable of grasping the following and more:

  • How bank accounts work.
  • How to track income and spending as numbers instead of coins.
  • How to avoid costly debt.
  • How to put money to work with compound interest.
  • How to allocate money to specific financial goals.

That sounds like a daunting parental task, but it doesn’t have to be.

You can do it all with a simple spreadsheet. That’s how I started out with my kids, and I’m not alone. The wildly popular financial blogger Mr. Money Mustache is doing the same. He’s using his “Bank of Mr. Money Mustache” spreadsheet to teach his young son about money too.


Why a Traditional Bank Savings Account Doesn't Teach Your Kid How to Save

Less than a penny in interest for a year of saving? Seriously?

What’s the best way to teach your youngster about saving and the power of compound interest?

Everybody knows you march your kid straight down to the local bank or credit union and open up a traditional savings account. Right? That’s certainly the conventional wisdom.

In fact, opening a savings account for your 6 year old is the “official” wisdom too. So says the panel of financial experts who make up the United States President’s Advisory Council on Financial Capability. It’s item 8 on their list of 20 things kids need to know to live financially smart lives.

My take? That’s complete bullcorn.

Let’s just think about this from a 6 year old’s perspective for a moment:


Everything You Wanted to Know about Kids and Saving, But You Were Afraid to Ask

Everything Your Wanted to Know about Kids and Saving, But You Were Afraid to Ask

Every parent knows kids should learn how to save, right?

OK, then, answer me this: how come only 1 percent of parents say their kids save any of their allowance?

Maybe parents have lots of questions about kids and saving, but they’re just afraid to ask.

That’s why we took to the Twittersphere with our friends @GiftOfCollege earlier this month. We posed 9 key questions about teaching kids to save, starting with the most basic: why?

Here are the 9 questions and an edited summary of the top answers.