I still remember the first piggy banks my sister and I owned.
Each week she would dutifully put in her 25 cents of allowance and I'd hear the satisfying "tchink" as the quarter landed on the bed of coins at the bottom. When I dropped mine in, the sound was usually more of a dry and barren scraping as the solitary quarter rolled around inside, a lonesome George in search of a few fellow former presidents to keep him company.
My parents opened savings accounts for us as well, with similar results. If checks from your grandparents can make dry and barren scraping sounds in your bank account, many of mine did.
Money was meant to be spent, was my thinking. I saw it all around me. Even when we went window shopping -- a very strange concept to me -- we'd at least see hundreds of other people spending their money. Not one time did we ever go "window shopping" at the bank.
I like to think I've improved my money management skills since then. Besides saving up to buy an Evel Knievel Stunt Cycle when I was 12, my wife and I own our own home, I balance my checkbook, pay our bills on time and carefully nurture a below-average tolerance for consumer debt.
What's more, with two kids of our own, I've been given the proverbial second chance when it comes to childhood and money.
The thing is, my wife had been handling most of that. So when it came time to write this article, I actually had to do some research. That worked out well, though, because I ended up learning some things, particularly with regard to teaching kids in their preschool and kindergarten years about money.
As many Seattle-area parents know, we have a great resource on these issues in the form of Moonjar, a local company founded in 2001 by Eulalie M. Scandiuzzi, and dedicated to advancing financial education through its three-part motto of "save, spend and share."
The idea behind Moonjar came in part from a story the founder heard as a child about how John D. Rockefeller kept three jars for each of his children's allowances, so that they could divide their money among the goals of saving, spending, and charitable giving. The company's main product is its three-sectioned moneybox, also called a Moonjar. (The name reflects a combination of lunar symbolism and the custom of writing down one's dreams and aspirations and having a place to nurture them.)
When it comes to preschool-age children, Angela McNamara, Moonjar's director of marketing, confirmed the conventional wisdom, which is that 4- and 5-year-olds are a bit young to receive allowance. However, she adds, preschoolers are decidedly not too young to start learning about money in general.
"It's really never too young to start the conversation," McNamara says. "But you do need to help them visualize." While many products out there, such as Moonjar's moneybox, can help, everyday objects such as checkbooks, a stash of coins or a simple toy cash register can be particularly compelling early on, since kids have usually seen them before.
Also realize that as a parent and their primary role model, you are already teaching them about money. "By the time they start school," McNamara notes, "they have seen hundreds, if not thousands, of financial transactions." This is the time to think about the principles you'll want them to follow, she adds, and to make sure you're modeling that behavior yourself.
If you want to follow Moonjar's model of save, spend and share, for example, talk to your kids about how you divide your own money. Some families still use objects like cookie jars to set aside funds for certain things. It's pretty low tech, but it's also a time-tested method, and can be a great tool to introduce the concept of saving and allocation to younger kids.
Age 5 is typically the earliest many experts recommend starting an allowance. When it comes to the details, however, expert opinion is more divided, particularly on the question of whether pay should be tied to performance. One school of thought is that this is how the world of work works. After all, when you're on a job you usually don't get paid just for showing up.
The other school of thought is that chores are what help make families work. By doing chores for their own sake rather than an allowance, members learn to depend on and be responsible to each other, and to be motivated by that, rather than financial gain. This strikes me as a handy trait, since it's unlikely a child's first roommate will pay to have the dishwasher unloaded.
No matter which system you use, many experts recommend that you set up a schedule and avoid giving out advances. "You're trying to create a habit," McNamara says.
Other tips she emphasizes are to teach good money habits deliberately -- don't just expect them to appear. Help your child set both long-term and short-term savings goals, and talk about how saving different amounts each week affects when they will reach those goals.
As children move from preschool years into elementary school, they want to move away from an instant gratification approach, but they need guidance. "Talk about wants versus needs," McNamara suggests. If your child wants something that he or she can't have right away, focus on how to achieve that goal, rather than on the denial. "Translate it into a positive activity. Think in terms of language tools and activities with those tools," she adds.
Another key factor -- probably the most difficult for a parent -- is to let children make their own spending decisions. They will learn about getting value for their money far more quickly when they own the entire experience.
When it comes to educating youngsters about money, parents can take many paths. But they all center around encouraging children to think about how to allocate each dollar that comes their way -- whether it's from an allowance, as a gift or eventually some sort of compensation -- to reach their financial goals. For it's exactly this sort of thinking that provides the foundation for good money management skills in the future.
And you can take that to the bank.
Josh Parks is a Seattle-based freelance writer and editor and father of two. He also regularly contributes articles on fantasy baseball for www.baseballnotebook.com.