Here’s a simple way to teach financial literacy to your family
What do you talk about at your family dinner table? Is money on the list, or is it taboo? This is an important question, because financial literacy isn’t on your child’s school curriculum. The life skills of planning a budget; managing finances; knowing how to save up for future goals: these all must be learned, and your home is the best place for it.
Maybe it wasn’t discussed during your childhood. Maybe you are uncomfortable with sharing financial information with children. So, you learn together. The goals you are setting for your future, and the actions you are taking right now: discussing these in frank, simple terms will help your family understand how money works in our society.
Your children need to know how hard you work for your income, how it supports the household, and the principles guiding your decisions about how it is spent. As they grow and thrive, the sensible management of money becomes something they absorb along with the nourishing food they are eating.
For example, you can share plans for an impending family purchase and your progress toward saving for it. You can help them understand that giving in to an impulse is not the best way to make financial decisions, and expensive treats are something you approach carefully.
If you’re not talking about money, or if you are, you are the one to decide. Your child’s future prosperity as an adult will be the result.
Keep it age appropriate: simple contexts for young children. Help them understand that, every time they watch you swipe your credit or debit card at the store, income is being used and the family budget will be affected.
Teens who spend their time online, watching other friends’ lives, need to learn the importance of contentment, not comparison. They will see other kids describing lavish treats and wonder why that isn’t their life. You can help them understand that the creativity of being frugal—such as keeping a sweet 16 birthday party well within the family budget—can have its own rewards.
Start a money tradition. Make sure these life skills are being taught. If you’re uncomfortable with this, ask your Financial Advisor to facilitate the conversation and guide you toward having ongoing discussions.