Book Review: How To Teach Your Kids About Money – by The Frugal Farmer

I was given the opportunity to review an eBook recently from my good blogger friend Laurie over at The Frugal Farmer. I’m happy to say that I finally got a chance to read this last weekend and this is my review!

Laurie blogs about her family’s mission to get out of debt and I frequent her site regularly because she has so many positive things to say about her situation and great advice for others in a similar position like me.

Laurie has a range of eBooks on her blog available to download and the one I’m reviewing today is called ‘How to Teach Your Kids About Money’ – a topic close to my heart as I have a 3 year old daughter myself.

How to Teach Your Kids About Money by Laurie (The Frugal Farmer)

The book starts with an overview of how important it is to have a money plan ourselves as parents. Children follow and learn by example rather than just by what we say. Laurie explains how she and her husband put together a plan to manage their finances so that they could be in a better position to educate their children to treat money responsibly.

Communicating about money with the kids is important

Talking about money with the family is a key principle outlined throughout the book along with the consequences of not doing so. Laurie stresses that not all details about family finances should necessarily be shared with our kids – however if we do treat money as a mystery where the kids are concerned, they could pick up on that and end up having misguided beliefs and even a fear of money as they grow.

There is a section in the book about teaching your children that money is earned. I’m a big believer in this anyway so I was pleased to see some real strategies in the book for doing this. For example, Laurie covers how her children earn money through doing chores and are also given the opportunity to earn more money by doing extra tasks around the house. I really like the idea of choices here and I think children could learn so much from the opportunity to make decisions like this.

Practical tips are included on teaching your kids the right beliefs around money

Laurie highlights something she teaches her own children called the 10/10/80 rule. In a nutshell, this means that 10% of earnings should be saved, 10% should be given to a good cause and the remaining 80% is for living on (at the most). I love this theory because as Laurie states, this teaches our children the concept of saving and giving from a young age – a concept which will hopefully stay with them throughout their adult lives.

A lesson in money that really stood out for me is when Laurie describes how to teach children about the perils of debt. Within this section, she has a great personal and practical example of doing this by allowing one of her children to take part in a ‘Debt Exercise’.

This ‘Debt Exercise’ involved Laurie and her husband loaning their daughter the money to buy something that she really wanted on the basis that she was to pay it back in full every week until it was paid for. At the end of the exercise, the ‘debt’ was paid back and her child is in no hurry to borrow again for something that she can’t yet afford.

This is a great practical lesson that any parent could use because it’s in a controlled environment first and foremost and secondly, by doing something like this, I think it would really help with teaching kids about what they really do want or need.

In summary

Overall, the book is very inspiring and a great resource to have for any parent. There are many other practical takeaways from this book – it really is a great read and at the moment, it’s free to download on the Frugal Farmer website so it’s a win-win situation! I’m not sure how long this excellent book will remain free of charge so make sure you grab your copy soon.

*Image taken from the cover of Laurie’s book.