Tips For Talking to Your Kids About Finances
With talk of stimulus checks and the economy, your child may be curious about what the future holds for their finances.
Teaching healthy money habits can be challenging, but it's one of the most important lessons you can share. And you don't need to be an expert to give them a solid foundation in financial literacy. Use these tips for a simple yet impactful financial talk with your kids.
Make it Age-Appropriate
Finances are complicated, so make sure you tailor your talk to their level of understanding and interest. Discuss terms like "budgets," "overdraft fees," "interest rates," and "credit scores." Regardless of age, it's never too late or too early to teach financial literacy basics.
Take Advantage of Events
A grocery store is a familiar place for introducing kids to the value of a dollar. But also remember to include them in other shopping experiences, such as buying a home or car or paying bills. Experiences like these can illustrate affordability, the process of making a payment, or how to apply for a mortgage.
Earning, saving, and spending their own money is one of the most excellent ways kids can learn about money management. Some families do this through a weekly allowance, paying for chores, or financially rewarding them for good grades. Others have their children work in the family business or encourage them to find another paying job.
If you are paying for chores, use that opportunity to discuss negotiating a raise. If they've found regular work, remember to talk about taxes and other withholdings lest they are shocked when receive their first paycheck!
Understandably, their first instinct may be to spend all of what they just earned. Teach them that saving should happen regularly and explain why. Illustrate how saving makes larger purchases possible and how it creates a safety net, so they always have cash on hand.
Be Patient with Questions
Money management is notoriously tricky to understand, even for adults. Answer questions with openness, patience, and give yourself credit for your personal experiences that support your expertise.
Remember that actions speak loud (maybe even louder) than words alone. Demonstrate to your kids that you practice what you preach when it comes to financial health and growing wealth. Call us today about refinancing your loan or applying for a low-rate mortgage and show them how you manage your money for a more secure future.