Teaching Kids About Money & Foundational Life Lessons
What we’ll be talking about in this article:
At Building Bucks, our mission is to engrain families with positive money habits. After 18 years of school and an engineering degree, I was ready to start developing cars. When it came to personal money habits, however, I didn’t know much. Learning from my lessons, we’ve made a system for our kids to engrain simple, practical, and positive daily personal habits. Now, we want to share the turnkey system that helps kids develop their financial educations. They learn important financial concepts such as the following:
- Income types
- Household expenses
- Budgeting guidelines
- Real estate investing (REI)
- Return on investment (ROI)
- Financial statements
In our system, kids will also learn and practice positive habits. Some examples are the following:
- Taking initiative
- Exercising daily
- Making their bed
- Keyboarding
- Practicing their musical instrument
We’re looking for families to further our mission, equip their kids with healthy money practices, and encourage great personal habits for a lifetime. We firmly believe that “practice makes permanent” and that building these financial, emotional, and physical skills early in life will set children up with a solid foundation from which to launch their lives. Please consider helping us refine the app we’re developing for today’s generation. If we’re fortunate, we can raise the financial wellness of communities everywhere!
Building Bucks Master Plan
After graduating from college with a mechanical engineering degree, I thought I was on a great trajectory and all set for life. I just needed to go to work, put my time in, make my dent in the universe, and retire…pretty easy, right? I quickly found out that I had tons to learn in personal finances. At that time, I was a newly engaged man and had started thinking it wasn’t just me now; it was going to be we, and I didn’t have any real-life experience putting a budget together or making guardrails on how much I should spend on things like rent, water, cars, gas, electricity and regular “surprises” like birthdays, holidays, and car repairs. I’m a firm believer that practice makes permanent in sports, life habits, financials…whatever you do!
I went to Kettering University in Flint, Michigan, where you get two and a half years of real-world experience as an engineer before you graduate. It was a great way for me to learn how to be an engineer because it involved all the mental, social, emotional, and physical aspects. I was highly educated as an engineer, but when it came to personal finances, I was a doofus. I had nearly no budgeting skills and many credit card boo-boos early on; it took nearly a decade to develop those mental, social, emotional, and physical muscles in financial management. I still have much to learn, but I’ve improved a lot – nowadays, I feel I have a much better grasp using systems I’ve developed over the years to keep me in line. When I became a father, I wanted my kids to learn from my lessons; I was looking for a way to teach and prepare them for the “real world”.
Reflecting on my experiences, I find it impractical that money management – one of the most vital skills in life – is never taught in a meaningful way to us anywhere. I decided to change that for my kids; I didn’t want them to go through what I did. Even if you have a class in school or a week-long project that taught you about personal finances, they’re rarely exercising those financial muscles consistently – on a daily basis, year after year.
This system we’ve built is not just an academic exercise – it’s more than reading a book and taking a test to see if you understand the concepts. Kids will learn these skills intellectually, emotionally, and physically when they get income in cash, pay their household expenses with that income, separate the remaining for saving or investing, and spend.
Brain development from childhood to 22 years old is extremely critical in pruning connections in the brain. You could, of course, learn healthy financial habits in your twenties, but it’s much easier to learn these principles when you’re younger, as practices learned and exercised during this time have a high chance of sticking for the rest of your life. Because of the “stickiness” of learning things in one’s childhood, my early money experience, and my love for systems (don’t judge!), I developed a simple financial system for my kids that engrains financial fundamentals.
One more thing…along with the financial experience-focused learning, we’re tied financial with a point system that rewards positive habits. Our kids are rewarded points to do things such as the following:
- Taking the initiative to do something without being asked
- Writing book reports on topics they’re interested in
- Exercising daily
- Being a good person in the community
Tune into our next blog entry when we talk more about the Building Bucks system for a lifetime.