Money lessons I want to teach my kids

Give them a strong financial foundation for a more responsible future.

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As a mother of young children, there are so many things that I want to teach my kids: How to say please and thank you; the importance of eating healthy; why you need to wash your hands often. These lessons are relatively easy to impart—if also a bit too easy for my 6- and 3-year-old to overlook or let slip their minds—but I've found it's tougher to capture those teaching moments when the subject is money.

While my children are far too young for in-depth money conversations, my 10 years of personal finance reporting has, for a variety of reasons, taught me that it's never too early to get children thinking critically about money. Providing a strong financial foundation now will hopefully make them more responsible adults—and less likely to still be relying on my bank account when I’m nearing retirement.

As my kids mature, I'll look to delve into more complex topics like credit and investing. For now, however, these are the financial lessons we're focusing on:

Money is better spent on experiences than things

A 2014 Cornell University study demonstrated that the accumulation of "stuff" doesn’t make us happy; doing the things we like—with the people we like—does. We've embraced this lesson and made an effort to demonstrate to our kids that money can do more than simply entertain—that our money should be spent on purchases and experiences that bring meaning to our life or result in lasting memories. We've said "no" to our kids so many times when they ask for cheap souvenirs on vacation that they've stopped asking for them and started just enjoying the activity itself.

Saving gives you options

The famous marshmallow test established the importance of teaching children patience. Saving not only reinforces the concept and benefits of delayed gratification—it also builds financial independence. For example, my son recently used the money from his weekly allowance to make his first purchase on his own—a set of walkie-talkies—and the smile on his face as he brought his hard-saved cash to the cashier was far more genuine and longer-lasting than the one he flashes when gifts are simply handed to him.

It feels good to give

My children are fortunate to grow up in a comfortable home, with plenty of food and far more toys than they actually need. I hope to teach them that not all children are so lucky and that we can use our financial footing to help families who may have less. In addition to a "saving jar" and a "spending jar," my son also has a "giving jar", which he fills with a portion of his allowance each week. We keep an eye out for local organizations or fundraisers with which he feels some sort of personal connection and encourage him to make a contribution from his jar. A conversation about the importance of that charity and how we can help in ways beyond simply giving money often follows.

While these money lessons are important for my family, there are so many opportunities to instill strong financial habits in your kids during those foundational, impressionable early years. Consider your family values, priorities and your unique situation to come up with a model that works for you.

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The statements and opinions expressed in this article are those of the author. Neither Fidelity Investments nor your employer can guarantee the accuracy or completeness of any statements or data.

Fidelity Brokerage Services LLC, Member NYSE, SIPC, 900 Salem Street, Smithfield, RI 02917

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