This special series is part of CentSai’s commitment to financial literacy at every level. We’re collaborating with financial education advocate Sam X Renick on a series of short interviews, videos, and tips. Executive and vice president of the Motherhood, Erin Olson tells Renick the most important money lesson she learned as a child and shares a tip for teaching kids about money.
Sam X Renick: What is the most important money habit you learned as a child? Briefly share the story of how you learned the habit and what impact it has had on you throughout your life.
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Erin Olson: My grandfather grew up during the Great Depression, and as a result, he was a frugal man who encouraged saving money and living well within your means.
I picked up on those lessons as a small child, and they’ve served me well as an adult.
I’ve always been very conscious of my savings account, 401(k), and emergency fund. I've never carried credit card debt, and I don’t spend beyond my means.
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Renick: If you could teach a child only one money habit, what would it be? Briefly explain why.
Olson: Children can learn different and progressively savvier money habits at certain ages and stages. But in my opinion, understanding the difference between wants and needs — and prioritizing spending accordingly — builds an important foundation for future financial health and habits.
Renick: Cambridge University research indicates that adult money habits are set by age seven. What if the research is wrong and adult money habits are formed earlier, perhaps around the age the “give mes” set in? What does this mean for families, schools, and the financial education industry?
Olson: Most parents and educators — and anyone who spends time around young kids — knows that children are little sponges who constantly absorb and learn from their environment. It is never too early to start modeling positive behavior and teaching basics about personal finance when and where it makes sense.
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For example, you’re not going to teach your 5-year-old about choosing a diverse investment portfolio. But you can lay the groundwork for healthy money habits by providing a small allowance to teach saving and budgeting.
Have a talk with your partner and kids and make a written prioritized list of your family’s wants and needs.
Discover more about Erin Olson at the Motherhood.