In a number of my blogs I mention that I feel there is not enough financial education in schools. Most schools don’t teach our kids about saving, investing or debts. I would love to see lessons on this topic in schools, but I’m not sure I can influence global change regarding what schools teach. The best I can do is to help recommend good books which hopefully parents will read to /with their children about personal finance.
I really care about this topic as the impact of a child saving from a young age is amazing!
Let’s assume a 25 year old starts saving $20 per month until they are 65 years old. If they managed to get 6% pa on average over that period, they would have $39,611 when they are 65.
Now, if that same person started saving $20 a month from when they were 15 years old then they would have $74,101 when they were 65 (assuming the same
return). That’s an extra $34,490 ($74,101 – $39,611) when they are 65.
The extra money they put into savings from age 15 to 25 was only $2,400 ($20 x 12 months x 10 years), however, it is worth an extra $34,490 when they are 65.
In order to get started on this journey, below I recommend two really good books for children (and their parents) read about saving.
For young children I would recommend: ‘Save Your Acorns‘
“I haven’t told you the best part,” said Grandpa.
“When you save your acorns, they don’t just sit there and wait for you. They grow into trees, and the trees give you more and more acorns.”
This book tells a story about not wasting all you have and the importance of saving in case of an emergency. It’s a great bedtime story for kids from the ages of 3 to 6.
The author, Robert Gardner, sits on the board of the Children’s Savings Council in the UK. Robert is passionate about teaching children and their families about the importance of budgeting, saving, investing and sharing.
You can buy it, via Amazon, here
For older children I would recommend: ‘The Richest Man in Babylon‘
“I found the road to wealth when I decided that a part of all I earned was mine to keep. And so will you.”
This book is a ‘must read’ for anyone who wants to manage their money in a sensible way. Too many people spend their earnings and then save what (if any!) is left. It should be that you save first, then spend what is left. This is a key message from this book.
The book is full of interesting and simple stories which provide different lessons on saving and money management. The author writes in ancient times style which is enjoyable to read.
The lessons that it teaches shows how the rich get richer. They save, invest and only spend what they need and can afford.
You can buy it, via Amazon, here
After reading these books, we set up investment accounts and started putting a small bit of money away each month for our two young girls (both under 5 years old). We’ll then get them to be responsible for looking after this when they are older.
I hope you enjoyed this blog. The more we can do to encourage financial education in schools, and help our children to save from an early age, the better. I would love to hear your comments / thoughts on this topic!
If you are interested in learning more about how to manage your own finances, then I recommend you read Rich Dad Poor Dad. After reading the book I took some actions, find out more in my blog “Becoming a ‘Rich Dad’”