Recently a parent who is using our Money Savvy Pig bank asked me how to teach her young son how to use the “invest“ slot of the bank. He (and mom) were confused about how to approach investing as a money choice.
Before you teach your child the concept of “invest”, first your child needs to understand and master the concept of save. We save and set goals for the things we want or need within, let’s say one year from now. So, if you are a 7-year-old kid, that would be something they would want or need by the time they are eight. Or, if it’s easier, if they are in first grade, by the time they are in second grade.
In his recent his column for Marketwatch, Mark Hulbert suggests that no amount of financial education will ever keep people from doing the wrong thing when it comes to their money choices:
“In my experience, the biggest obstacle investors face is not cognitive but behavioral. Even when they have sufficient knowledge, they still do the wrong thing. No amount of education will overcome that.”
Well that’s depressing. And wrong. Financial literacy basics learned and mastered early on can help overcome behavioral missteps later in life.
As I read an article advising people who are dating on how to introduce money as a topic for discussion, I kept thinking that all of the suggestions ignore one simple thing – using your own observation skills. One can gather a lot of info well before you even have that first serious money talk. I mean, in the beginning of any dating relationship, it would be pretty hard to start talking about setting a money goal together – right?
Before you launch into a discussion about credit scores and debt loads, considering just observing how your new date interacts with money – from the first date.