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

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3.95  ·  Rating details ·  214 ratings  ·  42 reviews

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

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Hardcover, 208 pages
Published January 14th 2003 by Simon Schuster (first published January 7th 2003)
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Stepan
Jun 12, 2010 rated it it was amazing
Recommends it for: Parents with kids 4-12 years old
This is so far the best resource I've read about helping kids learn how to manage money. By "best" I means that it matches my parenting philosophy of letting the kids experience control and responsibility as much as possible. This includes giving them the chance to make mistakes and learn from them.

Owen's approach is different from the Spend/Save/Gift (tithe) allowance model many parents use. His take is that it's better that saving and gifting comes from the child (they should learn the later
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K Titus Rodriguez
Sep 04, 2009 rated it really liked it
First of all my wife checked this book out of the library for herself. Somehow however, one afternoon it ended up in my hands and the first three chapters went by in what seemed like seconds. I don't normally read this type of book but found in the author David Owen, a friend. He made me laugh and carefully consider the way I deal with my children and the influence upon them of money and many other things. Lastly, and most unexpectedly was the surprise ending. This is a very good read.
Kevin Hanks
Oct 02, 2012 rated it it was amazing
This was a great book filled with really actionable advice. I actually done reading it thinking about several ideas I could implement immediately.

The premise is important: even if we don't consciously do it, parents teach their kids about money be it for good or ill. He presents some suggestions about how to teach kids the importance of money and the value of saving, weighing important spending decisions, and taking ownership if their decisions/purchases.

It was humorous and easy to read. I
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Zack
Oct 09, 2010 rated it really liked it
My only regret is that as a parent, I hadn't read this book earlier. Owen's book is deceptively easy and enjoyable -- it's a must-read for parents determined to help their children (and themselves) understand money, personal finance, and saving.

Have you ever debated whether to pay a child an allowance?
How much to give?
Should the payment of allowance be tied to chores the child must complete first?

Whether you agree with Owen's dogma, he lays out a framework to discuss, plan, and implement a money
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Rob
Jun 18, 2017 rated it it was amazing
I picked this up after hearing Owen's interview on Econtalk.

The genius of the First National Bank concept is that it is truly empathetic to how a child experiences time and agency. I found Owen's understanding of kids (and adults!) to be quite sophisticated, which enabled him to build a banking idea that, in itself, is quite simple actually.

The "time" element is key to the workings of the bank. Simply put: to a kid, saving must have relatively short term benefit, or it's not worth doing.
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Shiv
Jan 13, 2020 rated it really liked it
Great practical advice for giving children real experience with all of the basic skills they might need as an adult presented in a way that allows them to learn (and make mistakes) in a low-stakes environment.
McGee Lapish
Great ideas, but I find it difficult to determine how much to budget for the kids to use (as Owen suggests). I do appreciate how thoughtful the author was in thinking out his program.
Dolly
Jul 12, 2011 rated it really liked it
Recommends it for: parents who want to teach their children about money
This is a very interesting, and often humorous book on parenting and teaching our children about money. It's a quick read and with lots of anecdotes from his own life, I felt like I was sharing in his experiences more so than reading a self-help or how-to book.

The principles he teaches are well within our reach, although I'm not sure how far we'll take it in our own family. Setting up a small scale real-money version of the stock exchange might even be beyond my abilities or interest
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Janie
Jan 11, 2013 rated it really liked it
A few years ago, I got a lot out of the book Green Metropolis. When I discovered that its author had written a book about teaching kids about money, well, I wanted to read it! I wanted to read it so much that I put out a request for an ILL [inter-library loan]. I'm glad I did. J&I read it out loud to one another, contributing to my enjoyment.

I recommend it to parents who are considering whether or not to give money to their children, or wondering how to manage allowances. In my experience,
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Chelsea
Feb 06, 2014 rated it really liked it
He had a great writing style and his ideas are sound, just nothing that ground-breaking here. I personally am just a little too financially unsavvy as well as lazy to incorporate his whole Bank of Dad, let alone making my own stock market brokerage for my kids...but the principles are sound. I do like the idea of having a cash box where they make deposits and withdrawals and keep track of it on their own with minimal interference from the parents...teaches them how banks really work. The whole ...more
Brian
Aug 16, 2012 rated it it was amazing
A combination parenting/personal finance book that is heavy on practical advice. The vast majority of the book rang true for me, both in terms of personal experience (as an adult and as a kid) and as a student of behavioral economics.
The thesis of the book is pretty simple:
- Kids act perfectly rational about money. Banks and interest rates (especially now) make no sense for kids for whom 12 months (at .05%) is an eternity.
- Parents a hypocritical when giving kids money. They either get a
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Victoria Lin
Feb 21, 2016 rated it really liked it
Shelves: finance
This is a book about how to teach children about personal finance. It comes with some general parenting advices as well. However, you need to be neither a parent or a child to benefit from this book (I dug this one out from a friend's reading list).

At a technical level, the book provides 001-introductions of some basic financial concepts (that is, even more basic and easier to digest than 101-introductions). "The First National Bank of Dad" operates on very simple mechanism -- the operation is
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Kerry
Mar 31, 2015 rated it really liked it
Shelves: kindle
Very quick read. We've been using a spend/save/give plan and using iAllowance to manage it, but we've outgrown chore chart based allowances and needed to figure out how to do something else. This gave me a lot of good ideas- and some different perspectives to consider, like dumping the spend/save/give model and some areas to think through when dividing up financial responsibilities. I'm not sure I agree with some of information geared for older kids - no part time jobs during the school year, ...more
Arjun Narayan
Sep 07, 2015 rated it it was amazing
Great book, very quick read. Full of good reasoning, and actionable advice. Make sure to listen to the EconTalk interview with the author along with this book, as that is fantastic too.

One thing I would have added is to make clear the relationship between interest rates and discount rates. This makes it much clearer what's actually going on (that children have much higher discount rates given that their relative experience of time is far "slower" than adults). This was intuitive and clear to me
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Alan Johnson
Apr 05, 2008 rated it it was amazing
This an absolutely great book that delves into some successful methods the author has used to teach his children about money - specifically the saving of it. i had a lot of trouble saving money as a kid which endures even now - the author suggests establishing a "bank of dad" which resides on the parents' computer and pays out a higher and more frequent interest to make it more understanble for kids. I highly recommend this book to anyone who has children who will or could one day receive an ...more
Jeremy Zilkie
Jun 20, 2015 rated it really liked it
While I give this book 3 stars overall, I highly recommend the first couple of chapters on finances & allowance, the bank of dad, and the instruction on how to teach children the importance of interest, compound interest, and investing. Our family has been using this method for several years and it has been a GREAT system. I am thrilled to have found it.

Conversely, the rest of the book, on discipline and other parenting advice was not so "great" in my opinion. Owen's best work is his advice
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Tiffany
Jun 03, 2012 rated it really liked it  ·  review of another edition
Shelves: parenting
I thought the financial portion of the book was excellent. I'm totally on the same page as the author. The reason I didn't give the book 5 stars is because it seemed like he added a bunch of unrelated parenting advice at the end just to make the book long enough. For example he talked about the importance of reading to your children, which is great advice - but not for a book about teaching kids about money. Overall though, I definitely DO recommend this book. I'm even keeping my copy to refer ...more
Suzanne
Apr 12, 2011 rated it really liked it
This really helped my husband and I as we revamped our approach to allowances. Even better, the kids have responded well to it. The key take away is that you need to give kids control of their allowance and not force them to divide it into Spend-Save-Share. It's interesting watching the lessons they are learning along the way. I share more about this in my blog post here: http://www.growingrichkids.com/the-5-...

Matt Grommes
Aug 26, 2014 rated it really liked it
Very easy to follow, common sense advice. If it was written today it probably could have been done in 3 blog posts but we got it from the library and read it through in a couple of days. We've just implemented some of the recommendations about allowances and encouraging saving. We'll see how it works long term but I'm hopeful.
Ian
Jun 11, 2015 rated it really liked it
Shelves: development
First 6 chapters are great thoughts on how to teach good financial responsibility to kids through the use of an allowance, power of compound interest (give them 5% per month) and giving them the right to decide for themselves how to spend it. Final 3 chapters were more preachy on how to be a good parent in general.
Wendy
Jul 08, 2007 rated it really liked it  ·  review of another edition
I really like how the author is clear, concise, and funny. You read this book and it makes total sense, and then you realize how hard it is to put into practice. I am glad to be reading it now and not when my kids are in college!
Mikedariano
Aug 05, 2012 rated it liked it
Written from what sounded like a very upper middle class voice. There are a few nice tips that might work but also might be anecdotal evidence in the most extreme sense. certainly not a definitive guide though the author doesn't claim it as so, though other reviewers may.
Amy
Sep 11, 2009 rated it liked it
Shelves: read-in-2010
Gives some really interesting ideas on teaching kids about money. Just didn't agree with everything he had to say, esp when he gets opinionated on certain things. I did get some ideas though, so it makes it a worthwhile read (plus it was an easy and quick read).
Cameron
Sep 24, 2012 rated it really liked it  ·  review of another edition
What's great about this book is its simplicity. It's an easy read, and it doesn't complicate things. The innovate part is in the author's focus on the basic economic principle of incentives. He created a system that incentivized his kids towards saving and investing rather than spending and credit.
Jo Gilley
Jul 24, 2012 rated it it was amazing
Highly recommend this book, and his approach. It makes so much more sense than giving kids an allowance and making them put it in the bank, never to be seen again. Well-written, witty and easy to read.
Bre
Feb 13, 2015 rated it really liked it
I liked a lot of the principles he espouses (allowing children to choose, make mistakes, etc). I know that I won't implement his system exactly because my family is not his family but it is an excellent framework to build one's own financial literacy program for small humans.
Lynette
Jan 08, 2014 rated it really liked it  ·  review of another edition
Going to implement

Practical, quick read for parents. We started implementing the Bank of Dad idea immediately and our kids ages 6 and 9 are so excited to save money and earn interest. Wouldn't have predicted it and I love it!
Channing
He has some good ideas. I wish he had explored them a little deeper because I'm not completely sold on all of them. Interested, but not sold.
Roslyn
Jun 27, 2011 rated it it was ok
What a Dad who doesn't really know anything about money teaches his kids. The good news: they probably wont end up in debt. The bad news: they still don't actually know anything about money.
Shayne
Mar 14, 2014 rated it really liked it
Shelves: real-book
Practical and fun! Would recommend to parents of kids.
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