Whether or not we choose to talk with our children about money matters, they will learn by watching us. Our attitudes and actions in dealing with spending and family finances are the most powerful lessons our child will learn about money. What messages are we sending our children?
These are very powerful words and I hope they have piqued your interest. Maybe you are worried about how you are going to teach your child the important financial lessons needed to thrive in today's world. If that is the case, I sure have a neat idea for you. Below is an example of how you can teach kids many important financial as well as life lessons with one simple and creative idea.
I wrote an earlier post The Four Money Quadrants: Teach Kids Good Money Habits They Can Live With. In this post I mentioned the importance of teaching kids the habit of splitting all of the money that they earn into four quadrants. But, the trick is getting the percentages right in each of the four money quadrants. Some good numbers to shoot for in adulthood is SPEND 70%, SAVE 10%, GIVE 10% and INVEST 10%. I mentioned that for younger children the SPEND quadrant percentage should be lower whereas the INVEST quadrant percentage should be higher, however I never went into specifics. I figured that I would leave that decision to the parent, because all children are different.
Well, since I wrote that article I came across a wonderful resource called the Zela Wela Kids Life Skills Blog by Nancy Phillips. Along with all of the extremely helpful information in Nancy's blog, I also found a children’s book that she wrote called The Zela Wela Kids: Build a Bank.
The thought of building a bank with the kids intrigued me and I immediately bought the book. Nancy cleverly names the bank the "GISS" bank, to represent the four different categories: "G"ive, "I"nvest, "S"ave and "S"pend. Also, instead of talking about percentages (something most kids can't relate to), the book talks about teaching children the self discpline to break up each dollar earned into each of the four categories (in a more kid-friendly language): 10 cents for GIVE, 15 cents for INVEST, 25 cents for SAVE and 50 cents for SPEND.
My kids loved the story and couldn't wait to make their own banks. Recently we had a chance to build the banks together and I found it to be a fun and bonding experience with the kids. My kids didn't spend too much time decorating the bank though because they couldn't wait to start filling the banks with money.
Here are some pictures I took documenting the experience.
After building the banks with my kids and corresponding back and forth with Nancy via email, she mentioned that she created the "GISS" bank for three main reasons:
- Creating the bank is a physical and mental learning experience so children retain more about the concepts you’re discussing (through decorating it with the things they’re saving for, writing the numbers on etc.)
- Kids feel proud of their accomplishment.
- Children of all socio-economic backgrounds could have one.
By just teaching kids about the "GISS" bank and the great habits that they can learn from the "GISS" bank can be in itself it's own mini life lesson. Besides the fact that building their own banks gives them a sense of ownership, they can learn about compassion and a sense of community in the GIVE quadrant; the power of compounding interest over time in the INVEST quadrant; the habit of setting goals and the important virtues of patience and delayed gratification in the SAVE quadrant; and responsibility and enjoying life to the fullest in the SPEND quadrant.
So, what messages are we sending our children?
I'm so excited to share this information with you. If you have enjoyed the information or feel that it would benefit someone else, please share it. If you have any comments, please post them below, otherwise, feel free to contact me.