My mom taught me about needing to save money very early on; told me about why we did not shop for clothes but rather got hand-me-downs and donation clothes; told me that she always watched out for discounts on food and what was a "real" discount and what was just a big price in red; told me we did not have cable-TV or internet (back in the days) because we did not need it, and we could go to the library instead. She explained that this was all so that we could travel to her homeland, every now and then. I never resented it and I grew up to be like her, not wanting to spend useless money on things that the world tried to convince me I needed (a cellphone or a game console, for example) When/How did you start explaining this to a kid? Will you do it the way it was explained to you, younger?
My 3 year old seems to get it already. I am very generous in buying him toys at consignment sales, because I don't want him to feel deprived, like I was. The kid has more toys than a daycare center. But I will never buy him new toys, unless for a birthday or Christmas. He understands it too. If we see something at a sale and he really wants it, he'll say how much is it? If I say 1, 2, or 3 dollars, he understands that's cheap and says, so we can get it! If I say larger numbers he doesn't say anything, but will put it back. Also in the market he saw a beautiful fruit tray and said, we should get that for dinner! I said but it's very expensive, it's $20. Oh, ok, he lets it go. But instead we picked some up some fruit to make our own. I was worried before he started talking and rationalizing that it would be a hard thing to teach, but it's been one of the easiest concepts for him to grasp.
My daughter is three and I've started teaching her about money and about saving. She understands what money is but not the purpose of it yet. She also knows that when she receives money it goes straight into her piggy bank and it stays there.
My oldest are 8 and 5. This is the first year we opened a savings account for each of them. We've told them that once money goes into the savings account, it stays until college. We also told them we would match whatever they deposit in there, to encourage them to save. My own parents match our IRA contributions every year to encourage us to save and this is my version of the same thing.
