One thing I always promised myself I would do is teach my son how to manage money. My father owned a business and as I grew up I heard my parents discussing every aspect of the business every day. They taught me everything they knew about business, finances, investing, and saving. This enabled me to make good financial decisions in my life. It has been one of the most valuable gifts and one that I want to give to my son.
Ha has read books, started a savings and investment account, and had a small business all by 11 years old. One great tool that I’ve used to teach him how to manage finances is a game called Cashflow For Kids by Robert Kiyosaki, the author of “Rich Dad Poor Dad.”
Cashflow is really fun which is the most important part. A kid’s not going to learn as much if playing is a horrible chore they have to endure. My son begs me to play and his friends love to play when they come over. The game board is made up of two main parts: an income statement and a balance sheet. The income statement is made up of salary, passive income, and expenses. The balance sheet is divided into assets and liabilities. The assets are then divided into securities, real estate, and businesses. Liabilities are made up of borrowed money, credit cards, and mortgages. These are all mostly pictures and include definitions so are easy to understand. The whole point of the game is to eventually get more passive income than expenses so your money is working for you instead of you working for your money.
It’s amazing how quickly my 11 year old caught on and now uses these business terms in everyday conversation. This game is also one of the reasons he decided he wanted to save $500 to start a Scottrade investment account so he could begin to earn passive income by investing in dividend stocks.
I’m pretty proud of all my son has taken away from the game but I have to admit it also reinforces everything I learned from my parents and business school. I remember I should be making my money work for me instead of working for money just so i can blow it on things that don’t matter.
The best part of this whole learning experience? My son now understands when he wants something and I say my money would be better used on something else. He agrees with me and tells me to invest it!
Labels: Children, Giveaways/Reviews, Parenting, Values