While I know that she doesn't fully understand the concept of money yet, I am thinking ahead to the first couple of financial lessons to teach, and how using her bank may help. Here are a couple of foundational financial principles that I think are important to learn early:
- Always spend less than one earns. This has been the foundation many a good wealth building strategy. Two good corollaries to this are: Buy only what one needs and Pay oneself first.
- Save, invest and benefit from the magic of compounding. Be patient. A dollar saved today can be worth a lot in 30 to 50 years. Treat building wealth as a marathon, not a sprint.
In the near future, I think I will use an allowance in combination with the bank to instill these principles. By having her put part of her allowance in the bank before any spending takes place, I think she can begin making these principles a habit.
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