Making Kids Money Savvy: Try These Four Financial Tricks

Jonathan Clements:

Give them a few dollars -- and some financial common sense.

Want to make sure your children grow up to be money-smart adults? Check out the four experiments below.

My advice: Try these tricks on your kids, talk to them about the lessons to be learned -- and then quietly muse about whether you, too, fall prey to these financial traps.

Favoring today. If children are to save diligently once they're adults, they need to learn to delay gratification. Yet this skill doesn't come easily.

Want proof? Let's say you give your kids $5 a week in pocket money. When it's next time to fork over their allowance, offer them a choice: They can have the usual $5 right away -- or they can have $7, equal to a whopping 40% more, if they're willing to wait a week.

"It's about immediate gratification," says Shlomo Benartzi, an economics professor at the University of California at Los Angeles. "Getting nothing right now doesn't sound good, so they'd probably go for the $5."

Posted by Jim Zellmer at March 7, 2008 6:56 AM
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