Money Lessons for Your Kids

Are your children learning good money habits from you?  “Save up to buy shares in Nike before buying another pair of Nike shoes,” was the life-changing advice that Damon Williams, a teenage entrepreneur got from his mom, April Williams. The result, at 14 years old, her son, Damon, grew his net worth to more than US$50,000. Damon’s story is a hallmark of how parents can teach their children, the invaluable lesson of investing and saving at a young age. 

Financial experts agree that stories like Damon’s demonstrate one of the best ways to begin teaching children about money management and saving techniques.

Start teaching your children practical money lessons and even create some new ones with the tips below:

1. Budgeting Lessons:  Bill payment time is a great time to help your children get a realistic idea of the cost of items and make the connection between using water, light etc. and the corresponding expenditure/cost.
   
   - Every Mickle Makes a Muckle:  Involve your children in your monthly budgeting. Make it a game for them to determine the daily expenditure, by dividing the monthly bills by 30 to find an average daily cost, and then the yearly expenditure by multiplying the daily cost by 365.  It is amazing how little costs can add up! Appoint your child/ren as “Minister of Conservation,” with the responsibility to suggest and implement conservation ideas and track expenditure before and after their conservation “policies”.
    
2. Cash Purchase vs Loans Lesson: Loans are not bad, but many children do not grasp that loans cost more and consume future cash that could be used for other purchases or investments. If you are purchasing a big ticket item, for example, furniture, ask them to calculate how much more a loan will cost vs. buying it cash.  Similarly, ask your child which “big ticket” items he/ she  wants and then let him/her choose between borrowing from you and repaying interest vs. earning interest as he/she saves towards this purchase.
3. Be an Owner Not Just a Consumer Lesson:  When walking the supermarket aisle ask your children, to identify products they like and tell you how they can be shareholders of this company by buying shares on the Jamaican Stock Exchange (JSE). For example, if they like Vienna sausage or Frosted Flakes they could save to buy Grace Kennedy shares or Lasco shares.
    

Appoint your children “Ministers of Investment” and offer them the opportunity to invest the money they have saved in becoming an owner of these companies.  The money saved can be used to buy and sell stocks using JMMB’s Moneyline or invested in one of JMMB’s unit trusts such as JMMB Income and Growth Unit Trust, which returned over 45% in 2015!  Based, on the current price, you can start with J$6000. 

Do you want your children to be financially successful?  Allow your children to see you apply the money lessons to your own life.  Give us a call on 998-5662 to help you get started.