7 ways to be savvy about money as a new parent
When most of us think of the first conversations we heard about money between our parents, it would probably be a fight. Parents forget that there are little ears always listening and hearing whispering, negative comments or fighting can taint their association with money. Here are 7 awesome strategies to make sure you’re being a super dollar parent for your kids!
1. Be super positive when talking about money.
With any conversation you have with your spouse or other adults, make sure it is positive or informative. You’ll build a very positive money belief system when they are young. So many conversations that we hear as kids are fights related to how our parents can’t afford something. If kids’ first lessons around money are positive, then they won’t grow up with money being taboo subject. That will be the best money tip they will ever need.
2. Teach them where money comes from – the bank
Kids learn where eggs, milk, meat and bread come from when at school — why not money? Kids get to visit a farm or petting zoo during their early years but for some reason banks are some weird anomaly. Take your kids with you to the bank and let them see how banks work — where the money is kept in the vault, how pay goes in and the fact that that fixed amount is the only amount you can take out. When they get older they won’t be scared or confused by it and it’ll be something they understand. Let them open an account early and let them understand how what goes in is all that comes out. It’ll be a golden lesson when they get a credit card.
3. Get them to invest early
Let them start to invest in Disney, Mattel, Apple, Samsung, Amazon or companies that they use and understand. Buying them even one share of a cool stock would be a cool birthday gift. They can watch it as the market goes up and down and if the stock pays dividends they’ll get a bit of money every quarter or month.
If visiting New York City, take them to the New York Stock Exchange. It should be up there with the statue of liberty, Broadway shows and the MOMA. You’ll have a little Scrooge McDuck on your hands in no time with those first money lessons.
4. Build a Safety Net Right Now
You need three to six months of money in a high interest savings account for emergencies. You can’t dip into it unless you lose your job or can’t work for some reason. Knowing you have money saved will help with you being an even bigger rock for your family. Plop it in a high interest savings account and don’t touch it. Don’t even connect it to your debit card! The security of having that nest egg will send good money vibes to your entire family.
5. Contribute To Your Kids RESPs early
The government gives you a bonus when you put money into a Registered Education Savings Plan (RESP) so take advantage of it. Start when they are first born. Even saving $50 every paycheque will give you around $50,000 by the time your child goes off to university at 18 — depending of course, on what you invest in and how it performs. Take your kids to yearly meetings with your financial planner to review it and get them interested in their own money.
6. Use their birthday money and invest it for them
Any kind of money that your child gets as a gift should all be put away to build a nest egg for them. When they are 20 or 25 give it to them for a home. Buying a home is how most people build wealth and they’ll be off to the races when a one bedroom condo will be worth $5 million in Toronto or Vancouver, 20 years from now.
7. Play Money Games With Them
Taking the seriousness out of money and making it fun will create a positive association with money. You can start a lemonade stand, sell things on kijiji or e-bay, or start a cool tech business. Take advantage of the fact that kids are very technologically savvy.