September was a great month for our family! We implemented a new paid labor system (based on this book I read), the stock market was kind to us all, and we setup new money folders for the kids where they can keep their graphs, doll hairs, and wish lists (I'll share this at another time). On top of it all, Jr and Lil didn't spend any of their money!
The Kids' Net Worths
At the beginning of each new month, I go into their money stashes and count up how much the kids have. (New goal... make them count.) I enter that number, along with their investment data, into my spreadsheet to get a snapshot of their net worths.
We print out the charts each month and talk about them at dinner time! Mr. Sense and I don't do any "teaching" per se, we just ask them questions. For example:
Lil, what do the blue and orange parts mean? Why are there 3 columns on your graph? What does "Aug, Sep, and Oct" mean? What happened to the bars? How do you read 'this' number?
Jr, if you had to round your net worth to the nearest 10 doll hairs, what would it be? How much spending money did you have last month? What do you think made your investment money increase?
Such a fun conversation! I'm so happy that they love to see these charts!
(I know what you're thinking...and the answer is No... I never owned a pocket protector.)
New Investment Growth Charts
The kids are currently invested in Vanguard's VTSAX. Technically speaking, Mr Sense and I are invested in VTSAX and we pay the kids the interest rate we earn in that fund. At the point in time that it seems appropriate for them to have their own investment accounts, we will gladly transfer that money to them.
The investment growth charts were new to them this month! This geeky mama was pretty excited to share these with them, especially after the great month the stock market had in Sept. (I was kicking myself for making their charts in different colors... next month that will change!)
This chart is a little more confusing than the net worth charts. There was some more in-depth explaination.
Jr, do you see the blue bars? That's what you had in your investments at the beginning of the month. August started with no money, so no blue bar there. Then in August you added $50 to your account, and you earned a teeny bit of interest. Isn't it cool that while your money was sitting around in the bank, it went to work for you and got bigger! By the end of August you had a total of $50.08 in your investment account.
Now look at September... All of the money from August, $50.08, turned blue in September. That became your "beginning balance" for September. Then you added $4, and your interest earned was $1.35 for September. Pretty awesome month for your investments!
Okay, now look at October...
(Jr cuts in)
Oh, I see mom... all of the money from Sept turned blue for October. But where is the green?
Oh... you noticed. Well October is not done yet. We've already added the $6.50 you collected last month by doing chores, etc. But we don't yet know how much interest you'll earn this month. When October is done we'll add in the green bar.
New skills take time to master. I expect that we will repeat this conversation in a month and will go through some repeat questions and answers. That's cool! Jr and Lil are only 8 and 6 years old right now. I'm guessing that by the time they are say... 10 and 8, they'll understand investment growth better than most adults ;)
Blogging Means Learning New Things
It was a fun month full of changes! Starting this blog to document my hopes and wishes and goals is turning out to be a great way to challenge myself to grow as a mom and person! My research for the sake of the blog has led me to learn about many (non-finance related) things that will influence my parenting, my writing, and my life!