How to Raise Financially Intelligent Children…Let Me Count The Ways!

by | Mar 21, 2018 | Financial Literacy, Financial Literacy Articles for Parents, Financial Literacy Principles, Latest News, Money Camps

Guess what time it is? It’s financial education for your kids time! It’s time to do whatever you can to ensure that your children have enough financial smarts when they finally leave your house that they can not only survive but thrive out in this seemingly big, scary, exciting world full of opportunity we call adult life. The challenge with ensuring that your kids know what to do with the money they make (assuming they figure out how to make some), is that, generally speaking, parents don’t know what or how to teach their kids and schools either don’t teach them about money or don’t teach them the right stuff to be truly financially responsible in life. So…what’s a parent to do? Well, you have a few choices (some of which we can provide!):
  • You can teach them yourself! And just because YOU don’t know doesn’t mean you can’t learn and then teach them OR learn together. In fact, kids are usually relieved when parents admit they don’t know something and aren’t perfect. Suggest to your kids that you learn together OR you learn first and then share with your kids. And oh, it’s critical that you practice what you’re teaching yourself or the information won’t stick! A simple approach to teaching financial education at home is our Creative Cash for Kids Home Study program. You can learn more at www.innerwealthpublishing.com/creativecashforkids.php
  • You can make sure they are learning in school. If your child’s teacher isn’t teaching financial education, approach them with the idea and even offer to find and purchase a curriculum for the teacher to use. This way not only will YOUR child learn about money and investing but so will lots of other children as well. Our Money Game is a great solution and an easy to use, fun to play and teach financial education program for all. You can learn more at www.winthemoneygame.com.
  • Learn to teach financial education and offer to come into your child’s classroom, or any classroom, and teach the subject yourself. This is extremely helpful since most teachers are so swamped with rules, regulations and testing, they can barely even consider teaching a non-mandated subject. They’ll thank you for this!
  • Which brings up another idea…if it isn’t already, help get financial educated mandated in your state or at least in your school district. Yes, this will take some work but it’s ‘worth’ it in so many ways.
  • Get different money games and have money education events for your kids and their friends at your home on a regular basis. Be crazy and invite entertaining (i.e., not boring) financial professionals in to play with the kids, answer money questions, etc. It’s a great idea to provide prizes and such to get the kids interested in joining you for ‘money nights.’
  • If you have a teen, pay them to read financial books. Pay them $10 to $25 per book but have them do a short report on each chapter and have them tell you what they learned and how they might apply it in their lives. Start with any of the Robert Kiyosaki books and proceed from there. It might be the best investment you make in your child’s eventual independence.
  • Let your child be involved with anything and everything you do regarding money, running the house, investing, insurance, credit cards, etc. The more you expose them to now, the more they will be aware of when they leave home.
  • Send them to a ‘money camp’, like our summer Camp Millionaire or Moving Out! for Teens camps in Santa Barbara. They learn about money, investing, belief systems, assets, liabilities, planning and so much more and they have so much fun doing it. You can check them out at www.campmillionaire.com.
And last, but not least, it’s critical that children grow up knowing it’s perfectly OK to TALK about money. As human beings, we tend to make money ‘mean’ more than it actually is. We tend to think that people with more money are better, smarter, more important, luckier, etc. when in truth, money is just a tool to reach your dreams and help others reach theirs. So, what are you waiting for? Let’s make sure your kids never have to move home after they move out (unless you need or want them to that is!). If you have questions or need guidance, give us a call at 805-957-1024. We’re here to help. Making sure kids learn about money is what we live for!

Why We Buy

by | Dec 5, 2017 | Financial Articles for Adults/Couples, Financial Literacy, Financial Literacy Articles for Parents, Financial Literacy Articles for Teachers, money lesson, What you can do

Why we buy…it’s an interesting question, especially in our America the Great Consummerland.

There is a simple answer and a detailed answer.

The simple answer is “because we like to feel.”

The detailed answer is, well, a little more complicated but here goes…

We buy stuff, called piddlyjunk in our programs, because of how ‘we think’ a certain thing will make us feel. Let me explain…shopping

Let’s say you’re wandering through your favorite clothing store, rummaging through the dresses, and you come across the perfect little something for the office party you’re going to next week. Stop and think about what happens to you emotionally.

You see the dress, something inside you immediately sees how the dress can help make you feel a certain feeling that you’ve been wanting to feel:

  • Liked
  • Sexy
  • Appreciated
  • Desirable
  • Strong
  • Capable
  • In charge
  • And the list goes on.

Whatever it is about you that you don’t feel enough of, is often exactly the emotion that you’ll feel when you see something that ‘you think’ will make you feel the thing you’re missing (i.e., bulleted points above). I hope I didn’t lose you there. LOL.

For a fabulous list of 100 reasons why people why stuff, please read this blog (when you’re done here that is!): http://copytactics.com/why-people-buy-stuff

The interesting thing about consumerism is that it is pretty much driven by human beings sense of lack. I mean, think about it. When a normal, well-adjusted person has enough clothing, he often doesn’t have a drive to buy more until he perceives he needs something. It doesn’t mean he DOES need more…he simply thinks he needs more…often for the same reasons as the list above.

When we have enough, generally speaking, we stop having strong desires to go get more of that thing.

Now off the record, we all know people who buy more stuff even when they have more than enough. These people, especially, are looking to fill an emotional void and it’s often these people who have the more difficult time getting their spending habits under control.

Most of us have happened on the Hoarders TV show at least once and have said, “OMG, what possesses someone to do that?” unless of course, you have some hoarding tendencies yourself. If you do, you might want to consider getting some counseling…stat!

Or just keep reading. You may learn a bit about your ‘stuff’ habit because most of the reasons we do things repetitively is because we’ve allowed our unconscious drives to develop into habits but we’ll save that topic for another day.

The Main Reason We Buy Stuff

My best friend once told me that us human beings are usually struggling with one or more of the following self-concepts:

  • I am lovable
  • I am good enough
  • I am worthy

When a person doesn’t feel they are lovable, or good enough or worthy, they will do practically anything to find ways to feel lovable, good enough or worthy.

Stop and think about your own life and habits, especially your money habits, right now. Which one or more of the above three self-concepts do you personally struggle with?

Even though we’re looking at our financial habits right now, if one of the above really hits home, you will probably find that many of your habits in other areas of your life are also driven by the same incorrect self-concepts.

After all…you ARE lovable, you ARE good enough, and you ARE worthy.

One of our favorite sayings by Cheryl Huber that we teach at Creative Wealth is:

“How you do one thing is how you do EVERYthing.”

We have found it particular useful when it’s time to truly look at your life and make changes.

Some common reasons people buy…and they’re not in any particular order.

To get attention: when was the last time you bought a sexy dress or new shirt in order to get the attention of someone for any number of reasons: you want to date them, you want your boss to like you, you want society to acknowledge you and on and on.

To feel connected or a sense of belonging: let’s face it…we’ve all seen that certain groups of people, whether socioeconomic, career, sports, ethnicity and even gender, have certain types of clothing, cars, houses, vacations, etc., that the majority of people IN these groups relate to and are actually used to define the group so to speak. It only makes sense, then, that some people will buy a certain thing because it’s what the group they want to belong to has.

By the way, buying gifts is often for the feeling of connectedness but also for appreciation. We’ve all known people who got us gifts in order for us to make them feel good about what they did ‘for us.’ If you really want to give a gift and do it with pure intention, gift it anonymously. Try this and see how it feels. You might enjoy the feeling.

As I’m writing this and contemplating the different reasons people buy stuff, I find that every reason seems to circle back to one of these two reasons. AND it allllllll boils down to my original simple answer:

We buy stuff because of how ‘we think’ it’s going to make us feel.

How to improve your buying habits

These are some simple ‘buying hacks’ for helping you feel more in control of your buying, i.e., spending. Hope they help!

My favorite question of all to ask myself…”Can I do without it today?”

Virtually 100% of the time, the answer is YES, I can do without it today. Then I go about my day and rarely think about whatever it was ever again. If I DO continue thinking about it, I ask myself this next question.

2) Ask yourself, “What is it I think I’ll feel if I buy this?”

You have to be willing to be honest with yourself. There’s no shame in not feeling lovable or worthy or good enough and when you finally discover what’s underneath a lot of your buying habits, you can create new, healthier habits that actually take you down the financial road you’d rather be traveling.

Another note is that when you DO realize what’s underneath it all, there are a LOT of ways to improve your self-concept. One of my favorite personal growth guys is Kyle Cease. I’ve never laughed so hard and gotten so much use out of one man’s insight and wisdom in my life.

3) If you DO buy something you probably didn’t need, LEAVE THE TAGS on it and staple or tape the receipt to the item. Set an event in your phone or computer for a couple of days before the ‘return by’ date and make a new deal with yourself. If you don’t use it or wear it by then, TAKE IT BACK!

4) Ask questions. Why do you want it? Why do you want that particular brand? What is it about this thing you think you need that will fill whatever void you happen to be feeling? What perceived lack (because all lack is a perception…heck, all of LIFE is a perception) do you think this thing will fill?

Just keep asking questions and if you’re the journaling type then journal your little heart away until you figure it out.

Our financial habits always add up in the end. This is one of our 30 Creative Wealth Principles (aka rules to the money game) that teaches us that where we end up financially is completely dependent on our money habits.

Buying stuff, regardless of the reason(s), will either take us toward the goals we want to achieve financially or away from those goals. It’s up to you to unearth your own reasons for buying and get those unhealthy habits turned around.

So…why do YOU buy? Please post your comments below…we love to get feedback from our readers.

Summers and Lemonade Stands

by | Apr 20, 2015 | Financial Literacy Articles for Parents

Summer is here and you may be wondering what you’re going to do with the little ones…or wondering what they are going to be doing with themselves, if they are old enough to fend for themselves, that is.

The question is, How do you know when are they ready to fend for themselves? That is a great question. The only way to really find out is simply to give them a little rope and see what they do with it!

The great thing about summer is that, unless they have their first job already, they often have quite a bit of free time on their hands. They hang out with friends, bug you to take them places and, unless they are already getting an allowance, constantly ask you for money. Whether it’s a movie here, a mall visit there, an ice cream with friends every weekend, the nickel and diming can add up to a whole lot of change by the end of the summer.

What if you could could end up with a whole lot of change in a different way? What if you could empower them, instead, to make their own money this summer? What if you could set them on a path that would ultimately lead to financial self-reliance?

How about this: next time they ask you for money, turn to them unemotionally and say, “Wow, won’t it feel great when you figure out how to make that money yourself? I wonder what you could do to start creating an income for yourself right now?”

And then be quiet. Don’t say anything else. Don’t give ideas or attempt to rationalize the proposal. Just let them sit with the idea.

You’ll probably see some eye-rolling, a little shoulder shrugging and perhaps a good deal of frustration expressed in the form of ill-formed sentences protesting the injustice of it all. But, if you stand in your resolve to help them begin a life of their own, you may be very surprised at what comes next.

Once they realize you’re serious, your next question to them could be something like, “So, what do you see people buying or needing around you?” Let them think about this question for a bit. Suggest that they start paying attention to everyone around them. Notice what they need. Notice what they are buying. Notice what they are talking about in terms of products or services that they would like.

If you can get kids to do this, you will have saved them from the number one mistake many entrepreneurs make.

Oh, you want to know what that mistake is? OK, the number one mistake entrepreneurs make is this: they get a ‘great idea’ and then go off and expend a tremendous amount of energy and quite a lot of capital bringing that product or service idea to market without first considering whether there’s a market for the product or service in the first place.

Many businesses don’t even make it out of the starting block simply because there is no market (people) to buy their great idea!

Instead, teach your children to do what successful entrepreneurs do: they pay attention to what’s going on around them and pick a market (group of people like women, teens, boys, girls, golfers, basketball players, seniors, pet owners), they notice what that particular market is buying already and then they choose a product or service they think that particular market may buy as well.

This is how successful businesses are born. And this is how you can help your children take that first step in growing their own business. Once you’ve provided the catalyst for getting them to think about creating their own money and you can get them to start thinking about the above question, be ready to assist them every step of the way.

Help them refine the market (pet owns with big dogs, women with toddlers, etc.), help them write a business plan, help them create a budget and be ready to lend a little startup capital if needed (and yes, charge them interest or take a percentage of their new enterprise. There are valuable lessons every step of the way).

If all this talk about business is foreign to you, no worries. Simply help your child find a friend or neighbor who would be willing to step in as a mentor. Successful entrepreneurs often welcome helping a child start and run their own business. There’s nothing more fulfilling than helping a child learn the ropes of self-reliance.

There you have it. Whether it’s a simple lemonade stand or the creation of a new dog walking leash for seniors, help your children learn the lessons of business so they come to love the power in creating their own way, and money, in life. You’ll be doing them, and the world, a huge favor.

Elisabeth Donati is the founder of Creative Wealth International and an expert in teaching kids of all ages (including adults) about money and wealth creation in a fun and entertaining way!

If you’d like to read more interesting tips, trick and philosophy on money and life, sign up today for Elisabeth’s FREE Weekly E-Zine, Financial Wisdom with a Twist and FREE monthly teleseminars above.

How to teach your kids to be millionaires

by | Apr 20, 2015 | Financial Literacy Articles for Parents

Whoever came up with the saying “money does not grow on trees” should be fired. I assume they either didn’t read or agree with Benjamin Franklin who said “money is of a prolific generating nature.”

Wouldn’t it be wiser to use the “money and trees” saying to motivate kids and young adults to become disciplined savers and investors?

It’s a perfect metaphor to help explain the compounding principle. Just ask kids to picture orchards and orchards filled with trees, filled with fruit, filled with seeds, which all started from one seed.

After all, compound interest is one of the most-compelling and persuasive tools available to encourage short-term sacrifice for long-term gain. Furthermore, disciplined savers and investors are rarely free spenders, thus accomplishing both objectives.

Money’s ability to compound is of one its’ most intriguing and beneficial features. Compounding does not discriminate. Its magical characteristics work for anyone who chooses to employ it, regardless of their ethnic, economic or social background.

The concept is so powerful, Steve Rosen, Kansas City Star Kids and Money columnist, wrote that it’s possible over a lifetime to become a millionaire while earning minimum wage. As incredible as that sounds, the math bears it out.

One of my favorite ice breakers to help initiate a conversation regarding this astounding principle is by asking the old question, “would you rather have $10,000 or a penny a day doubled for 30 days?” It turns out that a penny a day doubled for 30 days adds up to more than 10 million dollars! Of course, no investment doubles daily, but it’s a fun way to introduce this important concept.

Another great ice breaker is to ask how many times a dollar would have to double in order to reach a million dollars? The answer is 20. You can then add to the fun by asking “how much money a person would have after ten doublings of the dollar?” The answer is $1,024. Half the work amazingly equals less than one tenth of one percent of the benefits. What a huge error it would be to become distracted and disrupt the doublings at this point, say to purchase an X Box, a Home Video System or some other “necessary” item.

The largest doubling is the last doubling, which is worth $524, 288 and is equal to the sum of the first 19 doublings. However, the twentieth and last doubling isn’t possible without the first and smallest doubling, from one to two.

When something compounds, it grows at a much more rapid rate than one expects. Time is a major ingredient in the compound interest formula, so the longer money remains deposited or invested, the greater and more magical the compounding effect. This explains how it’s possible to become a millionaire over a lifetime while earning minimum wage.

Let me provide you a few examples of this principle in action.

If an 18-year-old saves $100 per month and earns 6% until the age of 65, he or she will have accumulated $313,187, while only investing $56,400. However, if he or she delays the decision until age twenty five, he or she will accumulate only $199,149, while investing $48,000. The difference is $114,038.

If the saver happens to earn a higher return of 9%, which is possible but requires more risk, than the difference in either deferring or being unaware of the decision is even more consequential — $420,417. The 18-year-old would accumulate $888,549 versus $468,132 for the 25-year-old. The actual dollar difference in what they would have invested would be $8,400. Whether they earned 6% or 9%, earning an additional $114, 038 or $420,417 by starting sooner rather than later is a smart way to accumulate money.

Simply stated compound interest allows the saver to earn interest on interest as opposed to just interest on principal. For example, assume money deposited for one year earns one hundred dollars in interest. During year two, the original money deposited will earn another year’s worth of interest or an additional one hundred dollars. However, during year two, the one hundred dollars of interest earned in year one also earns interest, catalyzing the compounding effect.

Fortunately, you don’t necessarily have to be able to explain this principle in order to use it as a motivational tool. All you have to do is expose kids to a compounding chart or calculator. You can find charts in personal finance books and financial calculators online. I suggest the online calculators because you can personalize saving and investment projections, which will add more motivational fuel to the fire. Or you can always ask your local credit union or bank manager for help.

In summary, the sooner one starts, the less it takes to reach one’s goals. So, if it is security and riches you want to create, start saving and investing early, not late.

Sam X Renick is the author of two financial books for children: It’s a Habit, Sammy Rabbit! and Will Sammy Ride the World’s First Space Coaster?; he also produced the music CD titled Get in the Habit!; and is the founder of The It’s a Habit! Company, Inc., (www.itsahabit.com), a socially conscious corporation dedicated to providing parents and educators with wholesome, entertaining and educational tools that help them encourage children to develop good habits, especially saving money.

Did You Know?

Did you know splurging on a $3 coffee drink daily for a 15 year old is a one million-dollar life time decision? The same can be said for drinking two, 16-ounce bottles of designer water daily versus purchasing store bought water by the gallon. Ditto sodas purchased by the can or 20 ounce bottles versus by the liter.

What other million dollar habits and decisions do you see kids making?

Let Financial Freedom Ring

by | Apr 16, 2015 | Financial Literacy Articles for Parents

For most Americans, the month of July conjures up images of fireworks sizzling in the sky, back yard BBQs and the thrilling sound of patriotic songs; “Our country ’tis of thee, sweet land of liberty, of thee I sing.” America was built on a solid foundation of freedom for all, with the additional caveat that all men and women were created equal. At least that seemed to be the original idea.

The word liberty refers to the state of being free from other’s restrictions on how one chooses to live life. If we apply this definition to what we actually have today, we can see that there are millions of Americans who aren’t free at all.

Being truly free generally requires that we have the information and tools necessary to create that freedom. And in order to create that freedom, it’s helpful to have at least a basic understanding of how money works in society and the primary investment principles that are required to become free. In addition, a strong entrepreneurial spirit is almost mandatory these days if you really want freedom in your life.

Learning this critical information currently doesn’t come as a natural right of being born an American, or a Canadian, or a Mexican or a Frenchman, etc. Financial intelligence, for some strange reason, is usually relegated to ‘elective’ status when it is as necessary as reading, writing and arithmetic. And often when it is taught, it’s about budgeting and balancing checkbooks, not investing in passive income producing assets or thinking like a wealthy person. Heaven forbid, we teach kids how to become financially free when they’re young instead of expecting them to spend 40-plus years in a job where they will hopefully ‘accumulate’ enough money to ‘retire’ at some point in their future. What if we teach kids the concept of financial ‘utilization’ instead; using their natural born entrepreneurial talents to create businesses that allow them to live amazing lives while helping others along the way? Gone are the days of a good, stable, secure job; here are the days of creating your own way.

At present, most of America’s youth are not learning about money in school and the vast majority of children never learn about money at home. This is because most parents don’t understand money either and those that do, for whatever reason, don’t talk to their kids about it. The fact that such a small percentage of people actually understand the ‘language of money’ explains why the consumer debt number in America in 2007 reached an astronomical $2.5 trillion dollars, not including real estate mortgages. According to the Federal Reserve, $2,500,000,000,000 represents $8,200 for every man, woman and child that lives in the US.

Something happens when the numbers get this big. There’s a shift in our ability to conceive it as real. It is one thing to owe someone $1000 but quite another when that debt reaches $100,000. The idea of adding another $100 to a $1000 debt causes most people to consider what they are doing. Adding $100 to $100,000 worth of debt often doesn’t raise an eyebrow.

It’s a matter of contrast; the bigger the contrast, the smaller the perceived reality. This is exactly what’s happening when Americans view our national debt: the numbers are SO big that you just can’t wrap your head around them. It’s kind of like thinking about the Universe; our brains short-circuit and shut off.

So what do we do? Well, in my opinion we must start educating our youth about money. I believe the more we educate, the less we must legislate. How do we do this? I have three simple things that, if done, will yield amazing results for our nation’s financial future.

First and foremost, we must set a better example for our youth, from mom and dad all the way up to the highest branches of our government. Children learn first by example and they learn by example in three primary ways: by what they SEE; by what they HEAR; and by what they EXPERIENCE. Bottom line: start watching what you and others are teaching your children about money by what they see you doing with it, what they hear you saying about it and by the experiences your kids are having with it.

Second, talk to your kids about money.  Just like sex and drugs, if you don’t talk about it, you have no idea what they are learning, or from whom. We all have to get over the idea that money makes us who we are. Money is simply a tool to reach our dreams, help others and do good in the world. Money doesn’t make you happy, pretty, sexy or cool. Money generally just makes you more of what you already are. If you were greedy when you were poor, chances are you’ll be more greedy if you become rich. If you were generous when you were poor, chances are you’ll be more generous when you’re rich.

How do you bring your kids into the ‘family money conversation?’ Simple… just start  talking. Let them help you pay bills online and write checks, balance the checkbook, work on the family budget. Let them tag along when you visit your financial planner.  Invite them to work with you or give them a job in your business. Talk to them about your paycheck and taxes, your investments, your debt. Yes, I said your debt. What better way to help them learn about debt than to experience the pain around it. Don’t shelter them. Show them. Let them see that money is just another tool we all have to learn to use wisely. Make learning about money a family affair. Show them what it takes to be an adult who is working towards self-reliance and financial freedom.

Third, give your kids practice with money before they move out and their mistakes cost them dearly. College students are dropping out with huge amounts of debt. Some are even committing suicide over the debt they accumulate. For the most part, teens don’t have the maturity or necessary knowledge to handle their own finances. This includes all the credit card offers they are tempted with, the high cost of living and competing with their peers in terms of clothes, entertainment, vacations, phones and more.

Financial practice must start early and you must have a system.  The Ultimate Allowance is one such system. This book is the result of teaching thousands of kids and their parents about money for the past seven years. It shows you, the parent or guardian, how to run the money that you’re spending ON your kids, THROUGH them instead.

Consider this example: If your son or daughter came to you wanting to grow up and become a major league baseball player but you never gave him or her a ball, a glove, a bat, time to practice, a place to practice or heaven forbid, THE RULES, what’s the chances of him or her accomplishing the dream? Slim to none. This is exactly what we’re doing with our children. We MUST start teaching them how to think like, and make decisions like, people who value financial freedom over Piddlycrap.

What’s Piddlycrap? Just look around your house and you’ll see it everywhere. It’s the stuff we waste our valuable financial resources on every day; the stuff that goes down in value instead of up. The stuff you sell at a garage sale for pennies on the dollar. It’s the stuff that takes money out of our pockets instead of putting money into them.

Parents, your number one job is to prepare those beautiful kids of yours to be self-reliant ~ and loving them is not enough. This means you have to:

  1. set the best example you can;
  2. talk to them about everything money; and
  3. give them plenty of practice while they’re young.

Doing these three things will dramatically increase your chances of successfully turning America’s children into resourceful, financially free leaders who will make this country’s economy strong again. And isn’t this what all parents want?

In 2002, I dedicated my life to teaching our youth, and their parents, the basic financial principles I never learned in school or at home. I have taught many different races and cultures, genders and ages and, everywhere I go, I find people want to learn the same thing. They crave the knowledge they need to know how to make informed choices and decisions that will help them create a sense of freedom for themselves.

Isn’t that what this country is all about? Isn’t that where we started; a desire to be free? Isn’t that what Martin Luther King, Jr. was willing to give his life for? Isn’t that what this nation stands for?

Let’s make financial literacy mandatory in our schools and financial intelligence a sought after value. It’s time everyone had access to the information and tools they need to create real freedom in their lives. Join me in this mission, won’t you?

Why Allowances Do Work

by | Apr 9, 2015 | Financial Literacy Articles for Parents, Uncategorized

You may be thinking to yourself, “Is there something I can do to make sure my kids don’t move home after they move out?” In other words, you want a way to make sure they grow up to be financially self-reliant.

I’m here to say, ‘Yes, there are some relatively simple steps you can take to ensure that your kids leave home knowing what to do with that green stuff they will be in charge of making, managing and multiplying in the future.

More young adults are not only leaving college these days because of financial problems (student loan and credit card debt) but they are also moving back home after they graduate because they simply don’t make enough money to go it on their own.

The primary cause is simply that kids don’t have a clue what to do with their money, or anyone else’s for that matter. Most of them are very good at spending money, but it’s a rare 20-something that understands the dangers of credit card abuse or the power of saving and investing. Heck, for that matter, most adults don’t understand these concepts either.

Imagine this scenario…

Your son (or daughter) comes to you one day and says, “Mom, I have decided I really want to grow up and become a major league ball player.” You say, “Wow, that’s cool. Good for you.” And you go back to doing what you were doing.

Your child looks at you and asks, “So, would you get me a ball so I can learn how to throw it?” You say, “Maybe later.” He says, “What about a glove and a bat?” You respond, “Nah, I don’t think so.” He’s a frustrated at this point and asks, “OK, but will you at least teach me the rules?” You say, “Oh, you can learn the rules later.”

Now he is really angry; he’s fuming inside and feels stuck.

Finally he gets really mad and yells, “But MOM, how am I ever going to become a great ball player if I don’t have a ball, bat or glove to practice with and I don’t know the rules?”

This is what parents do, most unknowingly, to their children everyday in regard to money. We grow them into adults but rarely give them the equipment or rules to practice, and get good at, The Money Game!

Let’s look at three simple steps you can take to empower your children with the tools, knowledge and practice they need to grow up financially free.

FIRST, you must set the best example you can for your child. Since human beings learn best by example, it is critical that you first examine what you’re teaching your children through your actions because they really do speak louder than words. How can you expect your child to save and invest if you don’t? How can you expect your child to grow up with a healthy understanding of money if you don’t have a healthy understanding of money? How can you expect your children not to use credit cards if the only way they see you buy things is with a credit card?

The important thing to remember is that children learn from us three ways: by what they see us do, by what they hear us say and through the experiences they have with money. J know that they are always watching and learning from you in ways you probably aren’t even aware of.

If you’re like many adults who don’t understand money, you’re not alone. You weren’t taught when you were young either, however, now’s the time to make a commitment to educate yourself. There are books and seminars everywhere. A great place to start is a program called the Millionaire Mind Intensive. For more information, visit http://www.peakpotentials.com/a/tofreedomandbeyond.

If you’re doing well financially, good job. Keep asking yourself how you might ‘show’ your kids about money with your daily routine and include your kid’s friends. Kids often learn better from people other than their parents so look for opportunities to influence all the kids in your circle.

SECONDLY, talk to your kids about money. Take every opportunity you can to open up a line of conversation about family expenses, credit cards, debt, interest, investing, business, real estate, the stock market, financial beliefs, etc. Some examples of when to talk to your kids about money are:

  • When you take money out of the ATM, talk about where the money comes from, why you can only take out so much, etc.
  • When you pay for the groceries with a credit card to get points so the whole family can go on vacation, make sure they understand the importance of paying the bill off EVERY SINGLE MONTH!
  • When you pay bills, let them help you write checks or pay the bills online. Teach them how to check the accuracy of each bill.
  • When you deposit money into your bank, visit your investment advisor or accountant, take your child along.

The worst thing you can do is assume that someone else is teaching your child about money. What children learn from parents who don’t talk about money is that talking about money isn’t OK. A healthier way to look at money is simply as a tool to reach your dreams (a Creative Wealth Principle); it doesn’t mean we’re better or thinner or smarter than others. It’s simply a tool.

THIRDLY, consider giving your child an allowance, but not the kind you may be thinking of. In my book, The Ultimate Allowance, I teach you how to take the money you already spend ON your child and run the money THROUGH them instead. I’ve read that it takes an average of $275,000 to raise a child through age 17. If you run even a portion of that money through your child, imagine the practice he or she is going to get. By making plenty of financial choices—good and bad— they learn the ins and outs of money management before the consequences aren’t so damaging.

In summary, remember that human beings learn best by example. Your children are watching everything you do with your money, listening to everything you say about money and internalizing all the experiences they are having with money, so pay attention to the example you are setting.

And finally, please talk to them about everything financial. It’s the best investment you can make in your child’s financial future and we promise it will ‘pay off’ in the end!

For more information on all of our unique financial literacy products and programs, please visit The Ultimate Allowance and Creative Wealth International or give us a call at 805-957-1024.