Bermuda Parent Bermuda Parent Spring 2017 | Page 10

little ones
BY MIGUEL DAPONTE, SENIOR VICE PRESIDENT AT BF&M
Raising Kids Who Are
Smart About Money
W
hen I began writing this article, I started
off with the ordinary things you would
write when asked to put something
together for a magazine on money matters
such as saving for retirement and
investing.
Then my focus changed. I thought since
mothers historically have such an impact
on their kids, is there some way they can
to teach their kids about money matters?
My answer came from a book called The
Opposite of Spoiled – Raising Kids who
are Grounded, Generous and Smart
about Money by Ron Lieber.
The book was filled with interest-
ing anecdotes and lessons on teach-
ing kids about money, keeping them
grounded and handling those hard
questions about wealth like “Mommy
are we poor or rich?”.
1. Use an allowance as
a teaching tool.
Most people link allowance to
chores i.e. if you do this,
you get this. However,
the author argues an
allowance should be
independent of chores
because children “ought
to do [chores] for the
same reason we do —
because the chores
need to be done.” He
provides a neat for-
mula for an allowance
based on age not work
8
– “with children under 10, 50 cents
to $1 a week per year of age….with a
raise on their birthdays.”
2. Have them split their allowance
into three jars: give, save and spend.
Financially healthy adults will spend
about 80% of what they earn, save
15%-20%, and give the remaining bal-
ance. For children this can be used as
a lesson on budgeting. Each jar serves
as a stand-in for the values and virtues
that are the opposite of spoiled.
3. Let your children make their own
spending decisions.
“They’ll inevitably make mistakes or
spend money on trinkets and regret it
later when they don’t have money for
things they truly want,” says Lieber. “So
letting them make mistakes — spec-
tacular ones even — is a great way to
go, because then they learn.”
4. Explain how you distinguish
between wants vs. needs.
Every family will have its own
threshold for this, but even more
important is that you communi-
cate why you set the line there.
5. Involve them in your
giving decisions.
When you allocate your
charity budget, get your
children’s input. With
his own daughter,
ZEUDI HINDS PHOTOGRAPHY