Here are some positive tips to help parents teach their children about responsibly using money to help achieve their goals.
Only 17 states require high school students take a personal finance class. This is an excellent reason why parents should take the lead in educating their children about finances from an early age.
Instill the value of money. It can start early by teaching your children how to count money and explaining where it comes from, even taking them to the bank to see how it operates. Making a child’s first passbook savings account a big event can create a lasting impression that endures a lifetime. Children should learn what things cost to buy and how much money the family spends each year on various expenses.
Talk to your kids about money. The conversations can start early and should be geared to the child’s age. The goal is to teach kids about your family’s wealth, where it came from, and what you plan to do with it.
Goal setting is key. As kids approach their teens, you can introduce the basics of budgeting and investing. Budget management becomes essential as children reach their mid-teens. Have them create their own budget and keep track of money in and money out with a spreadsheet or app. You could even set up a mock investment account to help them understand the basics of investing.
Practice what you preach. Learning through example can be a very good way for kids to get a better understanding of money. Take them shopping with you, show them how you pay your bills on time, or save for a big purchase. Let them know what your family considers essential items versus items that are nice to haves and how you make room in your budget for both.
Maintaining wealth requires planning. As a financial professional, I’ve found family meetings can be a helpful way to help children understand the importance of financial literacy. Please contact me to discuss how I can help you and your children work together to learn the value of money.