When our twin boys turned 16 this past year, they began to cross the threshold into manhood: driver’s licenses, dating, and most important of all, job applications. It was their responsibility to get a job and it did not take them long to get hired at Wendy’s, the closest fast food business near our house. I sat down with them and looked at the benefits that Wendy’s offers and as is typical with a majority of businesses, Wendy’s offers a 4% match on their 401(k) plan. My boys and I strategized on how they could allocate their money as they started earning paychecks. I informed them that they needed to talk to their manager about enrolling in the 401(k) plan, to maximize all benefits the company offers and to get them started on a solid financial future. However, the manager incorrectly told them that they were not old enough to enroll in the 401(k) plan. After insisting that he check with corporate, the error was corrected and my twins were enrolled.
As the father to six children, I have learned that the best kind of financial education we can give children is through experience. My twins were able to experience a real world situation as they filled out 401(k) enrollment forms and felt the pangs of state and federal income taxes, FICA, and social security deductions. These financial realities are best learned early. However, learning what money is and how it functions in the real world can begin at an even younger age. The sooner they make the connection between work and money, the better. They will know that money does not grow on trees or magically appear in smartphone apps.
When you make fiscal education a priority in your household and give your kids a chance to make foolish mistakes, they will have