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Every Cent Counts

Every Cent Counts

In his book The Millionaire Next Door, Thomas J. Stanley revealed that most self-made millionaires do not go on to have particularly financially successful children. 

As the daughter of millionaires, am I doomed to the fate of others born with a silver spoon in their mouth? My current net worth may suggest so. 

How can wealthy parents instill in their younger children that every cent counts?

My short answer: by literally counting every cent. 

Throughout my childhood, my mom spent only cash. She'd take out a sum from the ATM every week to pay for gas, groceries, etc. All that cash spending led to quite a stash of unwanted change.

As adults, often see loose change as a hard-to-store, clutter-producing nuisance. Kids, however, love shiny things. (Well, some adults love shiny things still, too).

For our weekly allowance, my younger sister and I would count out the change that my mom had cast off from purchases throughout the week. This became our routine for as long as I remember (but, more likely, starting at the age when kids stop getting the urge to ingest small objects).

My younger sister and I would count out the money and divvy it in half. My mom stocked bank deposit slips at home (in retrospect, kind of weird) that we would fill out ourselves in preparation for our weekend trip to the bank.

Deposit slips and ziploc bags of change in hand, we would head to the bank counter to deposit our small fortune (usually less than $5). From the bank teller's view, it must have been adorable to see two sets of eyes barely tall enough to clear the height of the counter. 

The bank teller would print us a deposit receipt so that we could diligently keep a record at home in our savings book (a makeshift check register). The best part, though, was that before leaving the bank we got to pick a prize from the teller for our patronage (pencils with the bank logo, erasers, etc.).

Once a month we would be so excited to check the mail (said no adult, ever) because we knew our bank statement would be there for us to analyze. We would be over the moon to see how our account was growing with interest (hindsight tells me it was probably very, very little interest). These bank statements would go straight into our financial binders where we kept all bank statements in reverse chronological order.

What did we learn from this? We learned the name of each coin and their value. We kept our math sharp. We learned that quarters were amazing and that it took a lot of pennies to make a dollar. We learned to memorize our bank account number and to keep it a secret. We learned basic bookkeeping skills. We learned bank etiquette and bank lingo. We learned to slowly build savings. We learned the virtues of compound interest. We learned that every cent counts. Most importantly: 

We learned a money routine.

Last month Gary over at Super Savings Tips posed the question "Are We Heading Toward a Cashless World?" Although this has an obvious effect on us adults and how we go about banking and everyday life, how will affect the next generation? My little money lessons through coin counting will surely fall out of favor in a world where less and less of us carry around cash, much less coins.

At the risk of sounding crass and old, I'm tempted to shake my head and mutter, "Kids these days..." I have observed children play away on iPods and iPhones indiscriminately buying apps with money their parents have loaded to an iTunes giftcard or prepaid in the App Store. These micro purchases of usually only 99 cents surely will add up. The problem, though, is that the app-happy kid will never see a statement, will never count out those dollars and cents and, for all intents and purposes, will be as disassociated with the purchase as one can be.

Will they ever know the value of a dollar if they have never physically counted one, a hundred tarnished pennies at a time?

How did you learn your money lessons? How are parents to teach financial literacy in a tangible way in our increasingly digital world?

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