Sowing Frugal Habits in Our Children: Family Finance Picks #72

You’d be hard pressed to find parents who don’t want their children to enjoy the liberty of financial independence. So what’s the best way for parents to maximize the chances of that outcome? Perhaps the secret can be found in these wise money words from a great king of Sparta:

“By sowing frugality we reap liberty, a golden harvest.”
—Agesilaus

Each of this week’s family finance picks contributes thoughtful insights on how we can start sowing frugal habits in our kids so they can reap the benefits in adulthood.

The Opposite Of Spoiled: The Right Way To Teach Kids About Money

by J.D. Roth on Investopedia

I strongly agree with J.D.’s position that most financial literacy efforts fall short because they focus “too much on mechanics” (how things work) and “not enough on behavior.” Just because you know how something works, doesn’t mean you’re going to adopt the habits required to apply that knowledge effectively.

So how do we turn knowledge into effective habits when it comes to kids and money? Provide the “why” behind the “how” and lots of opportunity for hands-on practice. Also try the just-in-time approach to financial literacy mentioned in J.D.’s conversation with Ron Lieber: deliver financial insights to your kids “in the moment on an as-needed basis.”

To learn more about what organizations, programs and people are doing in these areas — like John Hancock with Biztown, Junior Achievement with Money Jar, and Ron Lieber with The Opposite of Spoiled — read J.D.’s article here.

Discuss on FaceBook.

Afraid of Looking Cheap in front of Other Parents

by Ron Lieber on The Opposite of Spoiled Facebook Page

Ron Lieber, the New York Times Your Money columnist (also mentioned in J.D.’s article above), is writing a book called The Opposite of Spoiled. Ron wants to “put money at the center of family conversations” as a way to explicitly build healthy money values and habits.

As part of his research effort for the book, Ron is collecting feedback via conversations with parents on his Facebook page. Here’s an example of a great conversation about a classic parental quandary when it comes to kids and money: Do you worry about looking “cheap” in front of other parents by not buying things for your kids that other parents are buying?

Here are my thoughts on that question:

I love looking “cheap” (aka frugal!) relative to the parental peer group, and I always welcome that conversation with my kids. that way I can hammer home the message that their spending decisions should never be influenced by concerns about what others might think. Instead, their decisions should be driven by their personal/family constraints and their personal/family values. As parents, it’s essential to keep up a constant vigil against the mindless consumerism messages that are kids are constantly bombarded with — keep up the good fight!

Note that I put “cheap” in quotes because I’m really referring to frugal behavior. Many folks confuse the two — labeling something as one when it’s really the other. That’s actually another really, really good discussion to have with your kids: the difference between being cheap and being frugal.

See how others weigh in, and contribute your own thoughts on Ron’s Facebook post here.

Three Vital Steps Parents Should Take to Improve Kids Money Habits

by Sam Renick on Sammy’s Save & Song Club

Sam makes 4 excellent points when it comes to teaching kids good personal finance habits:

1. Start Early
2. Reinforce Often
3. Practice
4. The Messenger Matters

Read his thoughtful commentary here.

Discuss on FaceBook.

We’re constantly scouring the Internet looking for articles related to family finances and teaching kids good personal finance habits. You can visit our ever growing list of family finance bookmarks here. We’re up to 3,331 now!