Compounding Activities

I want to try and teach my kids about money and how it works. It is really important to save money so that it can compound to make more money. The more I thought about why I want them to make good decisions overall and learn the right habits, I realized that I want those things to compound positively also.

I tried to explain this concept to my 6 year old daughter E and 4 year old son C one day. I was explaining that compounding was doing the right things and building a foundation to continue those things at a higher base. It works like that with money and health. I gave an example where someone who made good choices to eat their vegetables and get their exercise would get stronger over time. Those good choices builds a good foundation for that person to get stronger and stronger each day. It works the same way with bad decisions, where those decisions compound and it gets harder and harder over time to climb back up.

Surprisingly E and C understood that quickly and I wanted them to understand that concept for their health or habits. It’s easy to eventually see how money compounds because it’s a number you can track. It’s much harder to draw the conclusion that it works for other things that are a bit more difficult to track without focusing on it. I hope that because they know this concept, they can make better choices as they grow up. And now, I have E reminding me to keep my back straight so that my posture can get better through compounding decisions. Win win.