The First National Bank of Dad: The Best Way to Teach Kids about Money

by David Owen

Book Overview

Most parents do more harm than good when they try to teach their children about money. They make saving seem like a punishment, and force their children to view reckless spending as their only rational choice. To most kids, a savings account is just a black hole that swallows birthday checks. David Owen, a New Yorker staff writer and the father of two children, has devised a revolutionary new way to teach kids about money. In The First National Bank...

• Format: Hardcover
• Language: English
• ISBN: 0743204808
• ISBN13: 9780743204804
• Release Date: January 2003
• Publisher: Simon & Schuster
• Length: 208 Pages
• Weight: 0.76 lbs.
• Dimensions: 0.9" x 5.6" x 9.0"

Customer Reviews

I plan on implementing the author's advice with my daughter

The author's most illuminating insight is this: Children's perception of time is radically different from adults', and thus, their "time preference" is different. When you're eight years old, a year represents 1/8 of your life. Holding on to $20 to earn $0.60 in interest (if you're lucky) is completely undesirable, and parents who force their children to do so are imparting bad money values. In doing this, what they're teaching is that money received should be spent as quickly as possible, before parents can expropriate the cash and put it into "savings" -- a black hole in the eyes of youngsters. What the author did was create savings accounts for his children that conformed to their perceptions of time. Instead of offering 2-3% a year in interest, he offered 5% PER MONTH interest. This made saving more attractive and taught spending restraint. Additionally, the author and his wife gradually gave more and more financial responsibility to their children as they grew older. One example stands out: While on vacation, the author watched another child beg and plead and throw a fit until his father agreed to buy a $5 tomahawk at a souvenir shop -- the cheap tomahawk was broken before the pair even made it to their car. The author's child, by contrast, since he was spending his own money, and since he had an incentive to save rather than consume, bought a $0.30 item (after negotiating with the shopkeeper). People, including children, make much wiser decisions when they're spending their OWN money. Additionally, the author talks about how he established a virtual stock exchange (using real money) when his children were interested in stocks. And finally, the book closes with more general (and good) parenting advice, suggesting that parents read even more to their children than they already do now. I agree wholeheartedly with everything in this book, and intend to implement these ideas with my daughter, who is 19 months at the time I'm writing this review. The book's only weakness is its rudimentary explanation of stocks, mutual funds, and other financial instruments. This is unnecessary since the majority of the audience already understands these concepts, while those who don't need more information than the author is able to provide. No matter, I still strongly recommend this book and endorse the concepts championed by the author.

considering giving your kid an allowance?

This is a great book when trying to figure out how you feel about giving your kids an allowance. I read it several years back and recommend it to many preschool/kindergarten age parents. It definitely gets you thinking about your kid and how you want to have them think about money. It was a fast and fairly entertaining read - so much so that my husband decided to check out other books by the author (and wasn't nearly as amused by the other books). I don't bother giving my kids interest as he suggests as they are able to save fine when they have a goal in mind but I did put their allowance on Quicken as it was the only way any of us remembered to track it weekly.

A must-read for all parents, esp. middle class parents

I got a few books on how to teach kids money from the local library and settled on David Owen's book. Owen used his real life experience with his own children to get his messages acrossed. Some of the approached Owen used are really "out-of-the-box". He also offerred the lessons he learned from his experiments.Owen's philosophy is sound, his approaches are sensible, and this book is easy to read and often funny. Highly recommmended.

Much More Than Just a "Bank Book"

David Owen's book should be must reading for all parents with children under age 12. In the first part of the book he describes the success he has had with his own children in establishing a "bank" for them that is both understandable and lucrative. Later he gives excellent advice on providing allowances for youngsters and what they might do with some of the cash including the risks of getting caught up in bubbles nearly as scary as the great internet dot.bomb or dot.con fiasco of 2000: namely, beanie babies. Valuable lessons for children.Also, the simple language used to describe stocks and bonds could be very useful for young, inquiring minds. Almost surprisingly at the end he segues into the benefits of reading aloud for impressionable minds, and again makes good solid sense. In sum a great book for parents to own and read and even for grandparents to buy for them.

Good advice on how to teach kids a valuable lesson.

I read this book in one afternoon. It is a relatively quick and easy read. David Owen does a good job of supplying advice and a lesson in money management with a little humor. My son is 6 years old and I just started giving him an allowance so he can buy things and stop pestering me. It turns out that this is exactly what Mr. Owen recommends in his book.This book was enjoyable and informative; I recommend it to anyone with young children.