Rarely do you hear from people our age that they were educated financially at a young age. The finances, individual and the family’s, were not something that was ever talked about, but we have an opportunity to change that for the younger generations. I wouldn’t advise bringing your kids to the quarterly meeting with your financial planner Orlando. But starting when they’re young, and having regular conversations with your children is very important.
Have Open Conversations
Kids should be allowed to be kids, but that doesn’t mean withholding educational opportunities or keeping the family finances under lock and key. Finances can be taught at an early age and although the lessons should be simplified, you’ll be surprised at how much your child will retain. Their brains are still developing, so you’ll be giving them a leg up and lifelong lessons. Even by starting with small payments for chores, and starting a savings account, discussing with our kids how we as adults think about finances, is crucial to help them grow up with a better understanding of money.
Financially Teachable Moments
As children aren’t paying bills they tend to not quite understand the consequences of doing, or not doing things. So when they forget to turn the water off when brushing their teeth, or they leave the TV on when they leave the room, take these moments and make them teachable. Explain that the utilities are what make the lights and the T.V. turn on and off, and that the water is something that has to be paid for every month too. Discussing energy, wastefulness, and finances will create mindful children and result in mindful, conscious adolescents, and adults.
The Importance of Saving
There’s a reason that we get kids piggy banks when they’re babies; we know the importance of saving money. Having an emergency fund, or a nest egg, creates financial peace of mind and will come in handy at some point as we have all learned. Open a savings account for your child but talk with them about the importance of it and why saving in general is so beneficial. Many banks have savings account options for children, so if they receive an allowance or have a small money making job, reinforce the importance of saving, and the value of that dollar that they worked so hard for.
It’s time to remove ‘talking about finances’ from the taboo list. By talking about the family finances, vacation expenses, college or retirement savings, everyone gets to operate with a better, wholesome understanding of how things work. Our kids become our caretakers so it’s important to be on the same page, financially as well. Start the discussion with them early and reinforce positive financial habits.