Ten Useful Ideas to Help Them Understand Finances

The following is a guest post from Bay, who lives in Florida with her family. She loves teaching and in addition to teaching children, she’s continued teaching adults as well as her own children. Outside of teaching she shares her joy of riding horses with children who have disabilities, aiming to improve their quality of life. As a parent of two of my own children, I think a lot about how I’ll teach them about money. Thanks Bay for the guest post!

Parenting a child is never easy. Like most parents today, my husband and I took an objective assessment and decided there were many options and pathways for the rearing of our two daughters. Yes, we wanted them to be happy, respectful and successful which is vital but additionally, one of our family’s most significant ideal is making sure our daughters understand the importance of having money, how to manage it, save and invest for their future. 

The simplicity and the basis of being comfortable with our family discussions about building wealth is based on the tremendous money management knowledge that my dad taught to my brother and me throughout our childhood and young adult years. Hence, it was quite easy for my husband and I to formulate our family financial plan with heartfelt love, patience and confidence. Listed below are some our planning ideas:

1. Each child should be present and actively involved when establishing their savings or custodial account. Today’s advance technology is changing this process; therefore, your choice can be to open an account in-person or register online, both are good choices. Just enjoy registering together.

2. Grandparents whether near or far can be involved with teaching and supporting the family’s financial goals. While many parents are busy with careers, children’s homework and sports activities. Grandparents’ input is certainly a welcomed asset and can be remarkable.

3. My husband and I provided our children with their wants and needs, such as toys, clothes, social and sporting activities which were enjoyed. However, in lieu of gifts, it was the grandparent’s choice to purchase savings bonds, stocks in the children’s custodial accounts or give monetary gifts. 

4. Surely, earned allowances and monetary gifts can be beneficial in a child’s understanding of managing money. Savings set aside monthly can be invested. Encourage an accumulation of their savings allows a child to have investment options.

5. Reading articles and watching presentations together will explain how investing will benefit their portfolio. Additionally, it is necessary to learn that investing has it risks and rewards. Keeping it simple, consider making the family dinner table discussion engaging, fun, and interesting. 

6. Children as young as age five, help them pick stocks they would like to invest. Listening and learning about their choice(s) is vital! You will be amazed that their stock selections can be great long-term investments! Encourage each child (according to their ability) to keep track of their investment accounts on a paper portfolio file or computer-generated format.

7. Lead a discussion into the importance of generational wealth. Our family find holidays to be the best time to hold these discussions. Teaching your child how to legally obtain wealth and keep it versus squandering it away is a lifelong skill. Our family goal is to financially improve with each generation. “It isn’t where you came from. It’s where you’re going that counts.”¹

8. To understand daily required expenses versus desired wanted expenses can be incorporated. We love our family dog and there are those required cost for dog food, grooming and visits to the vet. Yet, there are those desired expenses to purchase tickets to the school dance and the high school football games that should not be overlooked. Know that there are such enjoyments, and both can be obtained.

9. Much consideration during the teenage years is having a debit card. This is an excellent way to help guide their money-making decisions. Being the custodial parent, you can get alerts on your phone and track their spending habits.

10. When the young adults are employed with a company offering retirement benefits, it is best to review the company’s plan together at home with an open discussion of how to save for their future. If you and your child need assistance, make that appointment with a reputable financial advisor.

We have all heard, “Money can’t buy you happiness” and wow that may be true. In our family, we truly believe, having wealth can give you financial options. Its transformational with family planning that you begin to build and teach how financial knowledge, discipline and investments will foster a pathway to monetary success.

1. https.//www.quotespedia.org, Ella Fitzgerald