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on | 6 COMMENTS

The 5 Things I Want To Teach My Kids About Money Fit On A 4 By 6 Index Card

Money Mentor Index Card

Keep it simple, stupid. Keep it short too.

I was reminded of the famous KISS principle while reading Ron Lieber’s recent New York Times Your Money column about distilling your financial to-do list to a set of bullet points that fit on a 4 by 6 index card.

The examples in Ron’s article inspired me to produce this variant: a “Money Mentor Index Card” listing the key things I want to teach my kids about money. Here’s the list.

I want to teach my kids about:

  1. Spending within their means using their OWN money and budget. (Note: the budget includes saving and donating too!)
  2. Everyday living expenses by sharing in the cost of the family cell phone plan.
  3. The power of compound interest by paying them an aggressive parent rate on savings.
  4. The cost and pain of debt via a parent-issued loan for a big ticket item, like a laptop or a phone.
  5. Patient, low cost, diversified investing via index funds held in a Roth IRA as teens.

It’s so short, I could KISS it!

What would you put on a Money Mentor Index Card for your kids?

6 comments:

Brian @ debt discipline aka The Blog Post Author

Your card is a good start Bill. I'd include the power of having a plan for your money and an emergency fund.

Bill Dwight aka The Blog Post Author

Yes, those are two great additions Brian. I had to chop it back a bit for "artistic reasons" :-) I've actually started making all 5 of my kids maintain a separate emergency fund bucket within the last year, separate from my high interest Bank-Of-Dad savings account. It's a terrific habit to start early - even little kids have "emergencies" (like lacrosse balls shot through neighboring windows...)

Robert aka The Blog Post Author

Love it! Hadn't thought of #4 before, but that totally makes sense. Thanks!

Bill Dwight aka The Blog Post Author

Thanks for stopping by, Robert. Yes, many parents abide by the rule: "never lend money to your kids" for fear that it will teach them to spend money recklessly before they have it. I think that's a good rule for everyday purchases, but paying off a BIG loan occasionally is actually a great learning opportunity and experience. With some prior experience, they won't be caught off guard by (or be complacent with) their first big loan (car/home/student) as an adult.

Formative Fortunes aka The Blog Post Author

The earlier the better, its awesome that you are teaching them all this. They will be prepared for the real world and ready to take it on!

MyCheQueMate.com aka The Blog Post Author

Bill, We feel our free website MyCheQueMate.com (which helps parents teach kids about the concept of money, how to earn it, spend it & save it) dovetails nicely with your list with the possible exceptions of #3 & #5. The concept is similar, parents are the bank owners while kids are the bank's customers. And our bank is called My Family Bank & Trust.

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