When should you start discussing money, REAL money, not the digital stuff we use every day
Hello and welcome to this episode of, I don't know Jack about parenting, where today I'm going to talk about money and when is it the best time to open up a savings account for your children.
They don't talk about how to save money
Welcome back to this episode. I don't know Jack about parenting. I will sit. I don't know Jack about money because that's the topic of today's podcast and you know it could be controversial. This is one of the topics that so few families discuss at home. You don't talk about how to manage money, they don't talk about their jobs, they don't talk about how to make money. They don't talk about how to save money and it's a real challenge because money is something that we're going to have to use our entire lives and let's define money really quick. It's just simple. It's a medium of exchange. See, I don't know Jack about parenting, but I do know that if there's something you're going to be needing to use the rest of your life, you should know a little something about it.
So why is this the topic today? Because I've been a bad parent. My son is seven and a half years old. His little brother is one and a half and today we just opened a, both of theirs first savings accounts. Now they have other accounts and other things that are in their name that is for them later in life, but they didn't have their own savings accounts, uh, so that he could manage their own personal money, right? Monies that come in for um, you know, presents and it just gifts and neither of them have allowances yet, but that's probably around the corner so that they can earn money around the house and see what it takes to earn money. And then when they don't do their job, they don't get paid and they don't do their work, they don't get paid. And if they don't get paid, they suffered a consequence, right? Of not being able to get the things that they want.
That's where they make the majority of their money
So part of the reason we got these savings accounts today, number one, and I'm going gonna touch on this for a second. If you're in a traditional bank, do yourselves a favor and look into a credit union. Credit Union is owned by the people who utilize it and a bank is owned by big corporations. Big corporations need to profit and the credit union does not. It's in the best interest of its owners, which is me and you if you're in a credit union. So interest rates are lower, there are no fees, there's no late fees. And if they are, you really got to be someone who is not doing really well with their finances in order to incur any of those fees. But in a traditional bank, that's where they make the majority of their money is by charging people, oh, these ridiculous fees that just don't make any sense because they are, for those who don't know, banks make a ton of money off you having money in their banks because then they loan that money out and make a ton of money. So when is it old enough or not old enough to, uh, open a savings account.
I think as soon as a child is old enough to start understanding or ask for toys and the things that they want is the first time they really have the ability. I would encourage anyone out there. I ran into this challenge on the first one. I remember his grandmother sent him some money for a birthday, I think it was like a $10 bill. He opened up the card. He wasn't old enough to read the card. And then there was this green piece of paper inside. And we're like, oh, you got money, and he literally looked at it and threw it on the floor. In a digital age with today's technology in our household, a lot of things are just electronic or a swipe of a card and pay online and I didn't realize that my son at age four had not ever seen cash and I was almost embarrassed as a parent. Like how does he not see cash? It's because we don't really carry cash.
They're gonna have to pay attention
He did see change because every time I got changed for something I would give it to him to put it into his piggy bank. So he understood that there was money going in there. We've counted coins and how he learned his coins from his coins, but he never really seen dollar bills or cash. He didn't really get that until he was about six when we did our first lemonade stand and he had to man the money. Other great tip in regards to money and let the kids understand it is we played two board games, kids versions that I think we're a integral in him understanding money and how it works a little bit was the game of life for kids and monopoly junior and as soon as they're capable allowed them to be the bank is they're going to have to give change. They're gonna have to pay attention to things a little bit more. These are tools that I have used and I think you can use, But I think I should have opened a savings account much earlier.
For various reasons which I, I really won't go into. But he could have made money on his money or we could have started doing other things with those monies that he was a part of. So the plan now that he has a savings account is that we will go into his account online and if he gets $10, I will take the money from him.
I want him to physically start seeing the exchange
I will put it into my wallet and I'll say, here's Daddy's account. You just gave them money. I just put it in my pocket. I'm going to take my account and you get to go see the money, go into your account and now you know and you get to watch your money grow. If you need to go and get the money for something you want or desire, we can go get the money out of the ATM. I want him to physically start seeing the exchange and feel the pain of driving. Listen, listen. In this instantaneous world, there is no pain in the swipe a card and that's why people are getting into credit card debt and student loan debt because they're signing their name to something and not fully understanding because they're not physically seeing this transpire today.
When he brought his piggy bank to the bank and put it in that big change machine and again at a credit union, this is not the grocery store that has a thing that charge you eight to 10 percent. It was free up to $250. He emptied his piggy bank and he got $130 and seventeen cents. He was like a kid in Vegas watching the money count. He was like, and I'm sticking my finger into his piggy bank, getting a change out and dumping it. Then every once in a while we would close it. It would count the change and he's like, Dad, are we going to get 100? Are we going to get 100? I was like, I think we're going to get over 100. The reason he wanted 100 and the reason we went to today was simple.
If you open up a kid's savings accounts before the end of the year, we're at the end of the year right now. They would match up to $100. So we taught him that when an opportunity arises to double your money, you do so. Which I will talk about when he's talking about matching a 401k, but I'm starting him at age seven. Planting seeds of how do we make our money grow? And that's one of the ways that we can make our money grow if people are going to match our contribution. So part of me is upset that I didn't create this sooner for him. But a part of me because he's starting to understand it at seven and can appreciate it and there's lessons to be learned.
I'm glad that I waited until seven. Now I think he's old enough and you understand enough at this age but you gauge it for your children, but I'm going to tell you right now, the sooner, the better that they understand money. Then when we send them off the college or send them out on their own and they have never managed, seen money, made money, grow for themselves, and then guess what happens? They go out into the real world and they're upset with you or they're reaching out to you say, mom, Dad, I need your help overran on my credit card that you got for me or her mom, Dad, I need your help. Like this budget thing, man, you gave me, you know, a couple hundred dollars and it only lasted a couple of days because they never had any self control or desire to learn about money and we didn't teach them.
I don't know about you. I don't know Jack about parenting. I don't know about you. I didn't know Jack about money when I went out into the real world because it wasn't taught to me at home and it definitely wasn't taught to me in the school system, so I had to learn on my own. Don't let your kids learn on their own. Empower them. We'll see in the next episode,