Building a “smart money” pattern for our kids starts when they are young. According to a Cambridge University study, most children’s money habits are formed by age 7. So, from the earliest time that they have money of their own, whether from a weekly allowance, doing chores, baby-sitting, or birthday money – whatever the source, they need to practice dividing it into 4 financial uses.
Using the GISS Method
One of the easiest ways to do this is to get them involved and have them build their own bank. Their bank needs 4 compartments. Label them “G” for Give, “I” for Invest, “S” for Save, and another “S” for Spend. From the beginning, when they get money, have them divide it into the 4 compartments:- 10% to Give
- 15% to Invest
- 25% to Save
- 50% to Spend