What We’re Teaching Our Little Girl About Money

It’s been 7 years since my little girl arrived into this world. Since that day, I have wanted to provide her with the very best life I could afford, while also making sure she had a secure future. I suppose that is what all parents wish for their children – a life better than the one they lived. I found myself a single parent for the better part of her first few years. Because of this, I worked extra hard to make sure she had what I thought she deserved. I didn’t want her to be the child who had to go without just because she didn’t have two parents at home. Hence, the first 7 years of her life went a little something like this.

Setting The Stage

When my little girl was born, I was living in an apartment and also subsidizing my parents’ living expenses to the tune of about $800/mo. This was obviously not the smartest asset allocation I could’ve picked but, nonetheless, that’s what was happening with my money. Read more about that here.

I debated moving into the house that I owned and living with my mother (my father had passed away before her birth) but, for various reasons, this was not something I wanted to do. Instead, I lived a very sparse lifestyle, swearing off new clothes and vacations so I could funnel any extra cash into her college fund or home improvements.

A few days before her first birthday, I purchased a second home for us. We moved in and started making our life. I was even more stretched for extra cash after this purchase, since I was still subsidizing my mother’s living expenses. Read all about how I had $200 left in my account after closing here! But who cared, I had a backup. I had a second house. I could always move us in with my mother if I needed to. My thought process went something like this…my little girl would never know about these early struggles because by the time she was old enough to remember, things would be different. It actually did work out this way. But, just by chance. Phew.

Related: Kids & Cash: Grasshopper Teachings

Early Money Lessons

Mary III

Mary Mantis!

As early as Mini could start to comprehend what I was saying, I started teaching her about finances and how to handle money. I taught her that everyday when I left to go to “work” I was leaving to make money. I taught her that we needed money for everything. We needed money for the food we eat, the gas we put in our car, and the water she uses in the tub.

She knows that she has to earn her money. She knows she only gets things given to her if it’s her birthday or a holiday. She knows that she MUST invest half of all of her money. The other night I asked her what she would do if someone gave her 1,000,000 dollars. Her response, “Buy companies.” Awe! Proud mommy right here. Then I asked her what she would do for fun. Her response, “Go to Chuck E. Cheese with my cousin.” And that my friends, is proof that money doesn’t buy happiness.

On top of finances, I taught her that she doesn’t need to pay someone to install ceiling fans or stain fences. I taught her the more she can do on her own, the more money she’ll have for toys and the fun stuff!

Related:Β Life Lesson: How A Mantis Saved Us Money And Enriched Our Lives

Liabilities vs. Assets

Now that I’m in a healthy marriage and living life as a dual-income family (awesome, btw!) we still live those same values. In fact, we still live on my single income while investing the second one. Score! Thankfully, we were able to become comfortable living a satisfying life without having all the luxuries available to modern man and woman.

Now, Mini is able to identify the difference between liabilities and assets. She knows that liabilities will eat you in a time of crisis and assets will feed you. Thank you, Robert Kiyosaki! She also knows that in order to be “rich” she needs to do the opposite of almost everyone around her. And, because we never up-sized our “starter” home together, she knows that bigger isn’t always better. πŸ™‚

Related:Β Frugal Hacks To Live An Awesome Life

What about you?Β What are you teaching your children about money? Or, what will you teach your children about money? I’d love to hear the lessons that other people in the community are passing on to their sons and daughters.

ember

Mad Money Cat has plenty of money.

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  • SomeRandomGuyOnline Feb 9, 2017, 9:53 pm

    Great lessons! I especially like the “must invest half of all of her money” part. I think that’s a great way to ingrain the habit of saving. My little guy is still too young (two months), but once he’s old enough I plan on teaching him the importance living below your means. Thanks for sharing!

    • Mad Money Monster Feb 10, 2017, 7:56 am

      Thanks! I love telling these stories. Congrats on your new little one! I was teaching our little girl stuff before she could really talk back. I’m sure I’ll miss those days in a few years. Ha!

  • SomeRandomGuyOnline Feb 9, 2017, 9:53 pm

    Great lessons! I especially like the “must invest half of all of her money” part. I think that’s a great way to ingrain the habit of saving. My little guy is still too young (two months), but once he’s old enough I plan on teaching him the importance living below your means. Thanks for sharing!

    • Mad Money Monster Feb 10, 2017, 7:56 am

      Thanks! I love telling these stories. Congrats on your new little one! I was teaching our little girl stuff before she could really talk back. I’m sure I’ll miss those days in a few years. Ha!

  • Full Time Finance Feb 9, 2017, 5:15 pm

    My sons are only 4 and 2. I am starting to teach my oldest about money. We bought him a toy cash register for Christmas and we’re slowly explaining that items he wants cost money and money takes money to gain. We’re not yet to the concept of savings but soon enough.

    • Mad Money Monster Feb 9, 2017, 5:21 pm

      Very cool! Nice work. Our daughter is now in the “want” vs “need” phase. Surprisingly, she learned it at school, not at home. I’ll mention a certain item and she’ll say, “No, you don’t need it, you want it.” Kids today! πŸ™‚

  • Full Time Finance Feb 9, 2017, 5:15 pm

    My sons are only 4 and 2. I am starting to teach my oldest about money. We bought him a toy cash register for Christmas and we’re slowly explaining that items he wants cost money and money takes money to gain. We’re not yet to the concept of savings but soon enough.

    • Mad Money Monster Feb 9, 2017, 5:21 pm

      Very cool! Nice work. Our daughter is now in the “want” vs “need” phase. Surprisingly, she learned it at school, not at home. I’ll mention a certain item and she’ll say, “No, you don’t need it, you want it.” Kids today! πŸ™‚

  • Get Rich Quick'ish Feb 9, 2017, 3:41 pm

    Our kids earn an allowance and I make them save half of it also. I want them to feel that something is off if/when they are ever unable to save half of their earnings. That’s pretty easy while their young, but my oldest is now 16 and ain’t got no time for his old mans’ money lessons. He wants to spend all of his cash. I can only hope that what we taught is still buried in there somewhere

    • Mad Money Monster Feb 9, 2017, 5:18 pm

      I must say, it is easy to brainwash a kid into being excited about saving and investing. Just like it’s easy to make them love a certain sports team. But I think by modeling good habits, they’ll come out okay on the other end. I’m sure what you taught your son is still “in there”. You’ll see πŸ˜‰

  • Get Rich Quick'ish Feb 9, 2017, 3:41 pm

    Our kids earn an allowance and I make them save half of it also. I want them to feel that something is off if/when they are ever unable to save half of their earnings. That’s pretty easy while their young, but my oldest is now 16 and ain’t got no time for his old mans’ money lessons. He wants to spend all of his cash. I can only hope that what we taught is still buried in there somewhere

    • Mad Money Monster Feb 9, 2017, 5:18 pm

      I must say, it is easy to brainwash a kid into being excited about saving and investing. Just like it’s easy to make them love a certain sports team. But I think by modeling good habits, they’ll come out okay on the other end. I’m sure what you taught your son is still “in there”. You’ll see πŸ˜‰

  • Nicole Feb 9, 2017, 2:52 pm

    Great read! My daughter is 5 and I am constantly teaching her about money. Currently, we do a price per chore system. It works great because she can do more chores to get more money if she wants to.

  • Nicole Feb 9, 2017, 2:52 pm

    Great read! My daughter is 5 and I am constantly teaching her about money. Currently, we do a price per chore system. It works great because she can do more chores to get more money if she wants to.

    • Mad Money Monster Feb 9, 2017, 3:03 pm

      Awesome! It will definitely pay off (so to speak) in the future πŸ™‚

  • JUsT Us Feb 9, 2017, 12:57 pm

    When my kids were school-aged, they didn’t receive allowance. Or do chores for money. Those were considered being a part of the contributing household.
    Instead, much like performance bonuses in the adult working world, my children were paid for their report card grades. A grade of C being average, was nothing, zero, nada, zilch. Receiving a B grade (80-89) earned them a bit ($1), an A grade (90-99)earned a goodly amount ($5), and a 100 in a semester scored them $10!
    On the flip side, a D was -$5 and (thankfully, no one ever did it) a F grade was -$10.
    My daughter consistently earned $50-$80 a semester, or $100-160 per year. My son wasn’t quite as stellar of a Performer, but he earned $50-$100 a year. When you’re a kid – this is GOOOOOD MONEY! And it reinforces good study habits pay off!
    It teaches that perseverance is worth more than intermittent effort. And that Extra Credit can take you far…

    • Mad Money Monster Feb 9, 2017, 3:03 pm

      I definitely like that approach, as well. We played around a bit until we found something that worked. She is still expected to do work that she isn’t compensated for, but when she does go above and beyond and do what we have listed out for her, she gets paid.

      Sounds like you did an awesome job teaching your kids the importance of a buck! What are their thoughts on the van??

  • JUsT Us Feb 9, 2017, 12:57 pm

    When my kids were school-aged, they didn’t receive allowance. Or do chores for money. Those were considered being a part of the contributing household.
    Instead, much like performance bonuses in the adult working world, my children were paid for their report card grades. A grade of C being average, was nothing, zero, nada, zilch. Receiving a B grade (80-89) earned them a bit ($1), an A grade (90-99)earned a goodly amount ($5), and a 100 in a semester scored them $10!
    On the flip side, a D was -$5 and (thankfully, no one ever did it) a F grade was -$10.
    My daughter consistently earned $50-$80 a semester, or $100-160 per year. My son wasn’t quite as stellar of a Performer, but he earned $50-$100 a year. When you’re a kid – this is GOOOOOD MONEY! And it reinforces good study habits pay off!
    It teaches that perseverance is worth more than intermittent effort. And that Extra Credit can take you far…

    • Mad Money Monster Feb 9, 2017, 3:03 pm

      I definitely like that approach, as well. We played around a bit until we found something that worked. She is still expected to do work that she isn’t compensated for, but when she does go above and beyond and do what we have listed out for her, she gets paid.

      Sounds like you did an awesome job teaching your kids the importance of a buck! What are their thoughts on the van??

      • JUsT Us Feb 9, 2017, 6:50 pm

        They’re actually groovin’ on the idea… mostly. They are both just launching their typical American path, albeit the frugal and anti-consumerism version.

        My daughter wants us to go live with her, but I would rather take a poke in the eye than to move to a Mid-Western college town! LOL! She has my “vaguely hippie spirit” and sees the adventure and freedom in being HomeFree! My son is a bit more stodgy and stoic about the house and home needing to be stationary, but he wants to travel and see and do – so he will soon see the benefit.

        When I get the solar solution functional, I think everyone will breathe a sigh and change over to the excitement and adventure view!

        • Mad Money Monster Feb 9, 2017, 7:34 pm

          Hahaha…”a poke in the eye”. I literally laughed out loud. Very cool that the kids are mostly on board. I look forward to your adventure!

  • Primal Prosperity Feb 9, 2017, 10:53 am

    Great job on your accomplishments and being a good role model.

    I recently gave a personal finance workshop to youth that was supported and collaborated on through the Rockstar Community Fund. You can read more about it in the links below. If you want specifics, feel free to email me and I can give you more information.

    http://forums.rockstarfinance.com/t/success-first-personal-finance-workshop-for-youths-was-held/1762

    https://primal-prosperity.com/2017/02/01/what-should-we-teach-kids-about-money/

    • Mad Money Monster Mar 12, 2017, 9:37 pm

      Thanks so much. And thanks for sharing.

  • Primal Prosperity Feb 9, 2017, 10:53 am

    Great job on your accomplishments and being a good role model.

    I recently gave a personal finance workshop to youth that was supported and collaborated on through the Rockstar Community Fund. You can read more about it in the links below. If you want specifics, feel free to email me and I can give you more information.

    http://forums.rockstarfinance.com/t/success-first-personal-finance-workshop-for-youths-was-held/1762

    https://primal-prosperity.com/2017/02/01/what-should-we-teach-kids-about-money/

  • Matt @ The Resume Gap Feb 9, 2017, 10:53 am

    Great lessons you’re teaching, from investing to frugality to DIY. Having that knowledge early will make a huge difference in her life!

  • Matt @ The Resume Gap Feb 9, 2017, 10:53 am

    Great lessons you’re teaching, from investing to frugality to DIY. Having that knowledge early will make a huge difference in her life!

  • Route To Retire Feb 9, 2017, 9:04 am

    You and I might be mirror images of one another.. πŸ˜‰ I feel like the majority of what I read is identical to our household (except we don’t have a cat!).

    I have a focus on making sure that my 6-year daughter does not feel the need to work a 9-5 for 40 years or more. I show her a lot of Kiyosaki’s ideals as well – I want her to be on the right side of the quadrant, so to speak!

    We go over the gist of why the rental properties work for us and I think she sees the value. The biggest win for us though was when we had a garage sale and she wanted to do a lemonade stand. We had her invest her own money into buying the lemonade and small bags of chips. She was ecstatic when all was said and done to see her profits… the foundation of a true business woman! πŸ™‚

    — Jim

  • Route To Retire Feb 9, 2017, 9:04 am

    You and I might be mirror images of one another.. πŸ˜‰ I feel like the majority of what I read is identical to our household (except we don’t have a cat!).

    I have a focus on making sure that my 6-year daughter does not feel the need to work a 9-5 for 40 years or more. I show her a lot of Kiyosaki’s ideals as well – I want her to be on the right side of the quadrant, so to speak!

    We go over the gist of why the rental properties work for us and I think she sees the value. The biggest win for us though was when we had a garage sale and she wanted to do a lemonade stand. We had her invest her own money into buying the lemonade and small bags of chips. She was ecstatic when all was said and done to see her profits… the foundation of a true business woman! πŸ™‚

    — Jim

    • Mad Money Monster Feb 9, 2017, 10:13 am

      I love the lemonade stand idea! Our little girl often makes little pictures and wants to sell them. It’s so darn cute.

      Our little one knows all about our rental property and likes the idea of people giving us money each month to live there. One day she said, “Mommy, I don’t want to get a job. I just want people to pay me to live in houses.” A chip off the ole block!

      Keep up the fantastic job you’re doing with your little one! It will definitely pay off!

  • Erik @ The Mastermind Within Feb 9, 2017, 8:37 am

    I was incredibly surprised when you said her answer to what she would to with $1 million dollars is buy companies. That’s fantastic.

    Do you think you will let her start investing some money when she is very young? Start her off with Intelligent Investor by Ben Graham perhaps? πŸ™‚

    I wish I’d have been able to do some investing for myself when I was 15ish. That’d have been both eye opening and interesting to get a taste for it. I didn’t start until 22, so while still young, I missed 7 years!

    • Mad Money Monster Feb 9, 2017, 9:04 am

      She has had custodial brokerage account for two years now. Each month I try to put at least $100 in it and I give her a laminated certificate on Christmas morning, just from mommy, saying she had $1200 deposited into her “companies” this year. I have everything in a total US stock market index fund. She doesn’t understand that, but she does understand companies. She knows that she “owns” part of Apple, Disney, McDonald’s. It’s awesome. Sometimes she’ll say stuff like, “If Disney owns Star Wars, and a lot of people go see the movie, I make more money, right, mommy?” I LOVE it!

      I sure wish my parents had done this for me when I was that age. But they had no idea about money and building wealth. I know better. So, hopefully, I am doing better πŸ™‚

  • Erik @ The Mastermind Within Feb 9, 2017, 8:37 am

    I was incredibly surprised when you said her answer to what she would to with $1 million dollars is buy companies. That’s fantastic.

    Do you think you will let her start investing some money when she is very young? Start her off with Intelligent Investor by Ben Graham perhaps? πŸ™‚

    I wish I’d have been able to do some investing for myself when I was 15ish. That’d have been both eye opening and interesting to get a taste for it. I didn’t start until 22, so while still young, I missed 7 years!

    • Mad Money Monster Feb 9, 2017, 9:04 am

      She has had custodial brokerage account for two years now. Each month I try to put at least $100 in it and I give her a laminated certificate on Christmas morning, just from mommy, saying she had $1200 deposited into her “companies” this year. I have everything in a total US stock market index fund. She doesn’t understand that, but she does understand companies. She knows that she “owns” part of Apple, Disney, McDonald’s. It’s awesome. Sometimes she’ll say stuff like, “If Disney owns Star Wars, and a lot of people go see the movie, I make more money, right, mommy?” I LOVE it!

      I sure wish my parents had done this for me when I was that age. But they had no idea about money and building wealth. I know better. So, hopefully, I am doing better πŸ™‚

  • rilmanstuff Feb 9, 2017, 8:03 am

    We have almost 6 year old and almost 8 year old and have tried to teach them well as we spent the first 6 years digging out of debt. I think the kids have forgotten what all we have been through but we have always tried to teach them that nothing is free and that daddy goes to work to exchange work for money. They also have to work for their spending money so we have a list of jobs they can do. The best part of it has been that since they only get toys for their birthdays (not Christmas) they have to work and save to buy toys. When we go to the toy section at Walmart to look it is nice to hear your child day ” what can I do to earn the money to buy that” this can generally be heard of the wailing of the little kid down the isle who’s parents said no to his demand for a toy.

    • Mad Money Monster Feb 9, 2017, 8:14 am

      That IS awesome! We also pay our little girl if she completes her chores. If she doesn’t, no cigar. We’re quite proud that when she does get money, she saves it with no intention of buying anything. When she does have her eye on something, she knows she has to invest half of her money and can spend the rest. If I do one thing right with her…it will be the money thing πŸ™‚

  • rilmanstuff Feb 9, 2017, 8:03 am

    We have almost 6 year old and almost 8 year old and have tried to teach them well as we spent the first 6 years digging out of debt. I think the kids have forgotten what all we have been through but we have always tried to teach them that nothing is free and that daddy goes to work to exchange work for money. They also have to work for their spending money so we have a list of jobs they can do. The best part of it has been that since they only get toys for their birthdays (not Christmas) they have to work and save to buy toys. When we go to the toy section at Walmart to look it is nice to hear your child day ” what can I do to earn the money to buy that” this can generally be heard of the wailing of the little kid down the isle who’s parents said no to his demand for a toy.

    • Mad Money Monster Feb 9, 2017, 8:14 am

      That IS awesome! We also pay our little girl if she completes her chores. If she doesn’t, no cigar. We’re quite proud that when she does get money, she saves it with no intention of buying anything. When she does have her eye on something, she knows she has to invest half of her money and can spend the rest. If I do one thing right with her…it will be the money thing πŸ™‚

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