Money Lessons We Learned from Kids

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A child sells lemonade at a lemonade stand

As adults, we put a lot of focus on finding the best ways to teach our kids about money. And rightfully so. Helping kids form good money management habits now can pave the way to a brighter financial future. But every now and then, it can be helpful to reverse roles and allow the teacher to become the student. Here are 5 money lessons we have learned from kids.

1. Keep your savings separate

The concept of a piggybank—saving money somewhere it can’t be retrieved without consequence—isn’t just for kids. Children are wise to put their money in a safe place that requires somewhat drastic measures (breaking the piggybank) to get it out. Whether we’re saving for retirement or some other future financial goal, it’s important to find a place to put money where we’re not tempted to take it out. Even the simple act of separating savings from everyday spending money can make a big difference in achieving financial goals.

2. Start saving early

Maybe the biggest financial advantage kids have over adults is time. When kids start saving at an early age, they can take advantage of compounding interest to build wealth over a longer period of time. Even small savings efforts can be hugely beneficial thanks to the time value of money. As adults, we can take a page out of our kids’ savings books and start saving now. We may not have the time advantage of our kids, but the sooner we start the faster our future savings will grow.

3. Money is finite

Just as we learn from our kids’ good examples, we can also learn from their financial inexperience. It probably goes without saying, but most kids have yet to unlock their full earning potential. And when they spend their savings, oftentimes they do so in one fell swoop with nothing left to show for their labors. This simple lesson in economics is a great reminder that money is a finite resource. Even as adults it can be tempting to make impulse purchases and spend unwisely. But like our kids, once our money runs out, it’s gone.

4. Be enthusiastic about earning

Anyone who has ever stopped by a lemonade stand or purchased a cookie from a youth bake sale can see the enthusiasm for earning money in the eyes of young entrepreneurs. As adults, there’s a valuable lesson to learn from this infectious excitement. That is, work doesn’t have to be a drag. It’s a good reminder to put a little extra heart into our labors, understand the present and future benefits of earning an honest dollar, and find the fun in earning (and saving) our money.

A child sells lemonade at a lemonade stand

5. Save for something special

Kids have an uncanny ability to set their sights on something and see it through. And when it comes to money, they can be great examples of never giving up on financial goals. Even if we have our sights set on something more significant than new clothes or the latest video game, we can be financially resilient and refuse to let life’s challenges deter us from our goals. Like our kids, we can remain fixated on retirement, paying off debt, or even putting away a little money to help send those little ones to college one day.

As we help pave the way to a better financial future for our kids, it’s important to find times to take a step back and learn a few lessons of our own. And if we pay close enough attention, our kids can teach us valuable lessons about life and money.