Growing up, most kids aren’t thinking about how they’re going to make money or have a secure financial future. Instead, they’re focused on all the fun things they want to do or buy, including keeping up with what their friends have that they don’t.
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However, David Delisle, money mindfulness expert at The Awesome Stuff and author of the children’s graphic novel, “The Golden Quest: Your Journey to a Rich Life,” thinks teaching kids about finances from a young age is essential. He shared his thoughts on what he wished his parents had taught him.
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Understanding the Value of a Dollar
As a child, it can be tricky to grasp why you can or can’t have certain things. Whether it’s a toy or a new article of clothing, you might think buying something is just a matter of handing over money, without understanding what it takes to afford those purchases.
According to Delisle, it’s never too early to start teaching this lesson. “When my boys were really young, they didn’t understand currency or money but they did understand chocolate bars and LEGO [sic]. So, when they asked for something I would put it in terms of chocolate bars and LEGO [sic]. If they wanted a teddy bear, it might cost 10 chocolate bars,” he said.
This concept also teaches kids how to budget, he said.
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Spending Mindfully
Knowing the true value of a dollar also ties into thinking more carefully before making a purchase. “Another really important lesson is money mindfulness, which is simply being more aware of our financial decisions and what’s really important to us,” Delisle said.
This relates to knowing what truly makes you happy, which he coined “The Awesome Stuff,” versus wasting money on things that don’t. This mindset teaches children that not everything is worth spending money on.
Delisle said he practices this lesson with his own children. “When they want to buy something, I simply ask ‘Is this your Awesome Stuff?’ and then let them pause and reflect. The answer doesn’t matter. It’s that pause and awareness which shifts everything,” he said.
Not Overthinking
A financial mistake that Delisle made growing up was “overthinking and making things more difficult than they have to be,” he said.
While it can be hard for kids to understand some of the finer concepts of investing, leading with simplicity can pay off at any age. For instance, explaining compound interest and how invested money can grow over time. Although Delisle was able to teach himself simple concepts like this by reading books at a young age, leading to his first investment at age 11, he wasn’t immune to mishaps.
“Trying to beat the market or follow trends is how you can quickly lose money. And we also often overlook the stress of constantly monitoring your investments. So keep it simple. All of my mistakes were when I ignored this,” Delisle said.
Instead of trying to pick the perfect investment or nail the timing, he said to get broad exposure through an Exchange-Traded Fund (ETF) and focus on adding more money to your investment portfolio. “The investing portion is the easy part; it’s developing the habit of investing that can be trickier and is the more important piece,” he said.
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This article originally appeared on GOBankingRates.com: I’m a Financial Influencer: Here’s What I Wish My Parents Had Taught Me
