There are many lessons out there that are designed to teach the K-12 set about money but fail most of the time as there is no real emotional connection made between the lesson and the student. We are all human which means that we are social by nature. That means we learn the fastest when our emotional system is impacted by an event. This includes academic instruction. So here are some suggestions on how to do this.
Introduce Work Early
The importance of work is less about the money than it is about emotional maturity. That emotional maturity comes from both learning responsibility and developing social skills as they work with both others like themselves that they did not know before and adults they did not know before. If this does not happen early (before age 10 or 12), the student is in danger of developing an introverted mindset and a major loss of self-confidence. This is hugely important to their self esteem. The job doesn’t have to be much but it does have to happen and it should involve taxes. A paper route qualifies here.
The Concept of Rent
With the job in hand, charge your child rent for living with you. You are obviously not going to keep it, but the idea is to introduce the concept of renting versus ownership. The rent you charge can be divided into an investment in college and later rewards or holiday gift money. The options are numerous but the lesson and emotional investment by the child in its understanding is enormous. Their schoolwork will improve as the math concepts will become real to them and they will likely accelerate to the point of overachieving.
Since the child is now earning money and incurring expenses, it is time to help them set up a budget. You are essentially creating a young adult when they are still a child, but that is the current pace of our culture so it will help them immensely. They will learn how to budget their accounts and hopefully save for the future.
What the Better Paying Jobs Require
Once they start making money and accustomed to paying rent, they will start asking about higher salaries. That is exactly what you as a parent want because it is an easy segue into the purpose of a high school and college education. The child will recognize their value and their emotional commitment to their academic success will increase dramatically. This is when grades normally go up because they now understand why they are in school in the first place.
How to Make their Money Work Harder
With all the above going on, they will naturally ask of other ways they can secure more income. This will be a natural segue into investing, what it is and how to do it. A child who reaches this point will likely end up very successful and possibly leader of the country.
Teaching children about money often fails because the lessons often only involve showing them the currency and how much something costs. Those lesson automatically become abstract because the child has not ‘skin’ in them. They are not using their own money or care much about their own money because the tasks required of them to get it are often very simple. For children to learn properly about money, they need skin in the game which means an emotional connection to the money they are earning and paying. With that put in place, a leader can be born.