As SEC registered investment advisors, my team and I learn a lot about our clients’ short and long-term financial goals through many candid conversations and building enduring personal relationships. We also often learn about their frustrations and regrets regarding past financial decisions.

During these conversations about financial regrets, we often remind clients to remember that with time comes perspective and experience.

So while you, as adults, may have regrets about past financial blunders, you can use your financial knowledge and experience to help your children steer clear of the same mistakes.

There is no better time to learn about the importance of teaching your children about financial literary and matters that will to help them form good habits.

4 Key Points to Help Your Children BECOME Financially Successful Adults

Are you hesitant to speak with your children about financial matters because of how you’ve handled past situations? Well, you aren’t alone.

Many parents are reluctant to speak with their kids about finance topics but haven’t considered using their personal experiences as a lesson to teach their kids about financial consequences.

While you may think your child will learn financial literacy in school, only 17 states in America currently require students to take a personal finance course.

• If children aren’t learning about money from you and/or a guardian, many children are left in the dark or could learn negative financial habits from their peers or the media.
• Broach the financial conversation with your children knowing you don’t have to be a financial expert in order to teach them helpful lessons for the future.
• Sometimes these financial conversations even help parents take better control of their own financial situation, in order to be a strong role model for their children.

Not sure which financial lessons are most important for your children to be aware of?

Here are four key points in financial literary lessons to consider when you are preparing to teach your son or daughter how to build a solid financial future:

1. Earning Money

One of the first experiences your child will have when it comes to financial matters is earning their own money.

Whether you are offering a small stipend for jobs around the home or your child has a part-time job after school, earning money through physical or mental effort helps your child associate financial value to labor.

2. The Importance of Budgeting

The topic of financial budgeting can be brought up at a relatively early age. 

Whether your child earns an allowance or is paid from a job outside of the home, discuss how he or she can create a budget with the earnings.

• You may require the income your child earns to be used for discretionary spending – things like gas, going out with its friends, or buying a new clothing item.
• Be sure to help your child create a financial system where a portion of his or her money will go into savings, an emergency fund, their car or phone payment, etc.

Budgeting helps your children learn the value of money. 

It also educates them to develop a clearer picture of the time and effort involved in obtaining something of value or to make a major purchase in the future.

3. Saving Money

Saving money seems like such a simple topic. Yet saving money is often not discussed with younger generations. 

As young men and women between the ages of 17 and 25 make plans to move away from the family home, many are unprepared for the shock of monthly bills and being tied to contractual obligations, such as rent, phone, and monthly car payment contracts.

By helping your child to create a firm grasp on saving money and budgeting ahead of time, it can bypass “bill shock”, in addition to feelings of anxiety and confusion when he or she moves out of your home.

You can also teach younger children about saving money and help them create financial literacy at an early age through the use of a piggy bank, and older children through the opening of a savings account and setting up various financial goals.

4. The Difference of Needs vs. Wants

Because we live in a want-driven society, this is a crucial discussion to have with your child. 

As humans, we “need” food, shelter, clothing and security to survive – whereas our “want” is something we desire but do not depend on to live.

Educating your child about that “needs” should be built into their financial budget, whereas a splurge or extra money fund is what should be paying for the “wants” in life.

Of course, this can segue into a much broader financial discussion of why your child wants something. Possibly because his or her friends have it, or so your child thinks it will make them more likeable, etc. There are many helpful future financial conversations that can come from this topic which will benefit your children for years to come.

Takeaway

Create a plan to start having regular discussions about money with your child.

• Educating your children while they are young can help him or her to build a strong and positive relationship with money and creates financial literacy.
• It also instills in your child the value of earning money, budgeting, saving, and setting up a secure future.

For more information on how to teach financial literacy to your younger children, click here, and for teens, click here. Both links offer financial concepts and tasks that will help them develop the skills needed as they prepare for adulthood.

If you would like a customized plan and personalized financial guidance as you educate your children about money, please contact our experienced financial advisor team at Hudson Companies for a complimentary consultation.

As SEC registered investment advisors, my team and I learn a lot about our clients’ short and long-term financial goals through many candid conversations and building enduring personal relationships. We also often learn about their frustrations and regrets regarding past financial decisions.

During these conversations about financial regrets, we often remind clients to remember that with time comes perspective and experience.

So while you, as adults, may have regrets about past financial blunders, you can use your financial knowledge and experience to help your children steer clear of the same mistakes.

There is no better time to learn about the importance of teaching your children about financial literary and matters that will to help them form good habits.

4 Key Points to Help Your Children BECOME Financially Successful Adults

Are you hesitant to speak with your children about financial matters because of how you’ve handled past situations? Well, you aren’t alone.

Many parents are reluctant to speak with their kids about finance topics but haven’t considered using their personal experiences as a lesson to teach their kids about financial consequences.

While you may think your child will learn financial literacy in school, only 17 states in America currently require students to take a personal finance course.

• If children aren’t learning about money from you and/or a guardian, many children are left in the dark or could learn negative financial habits from their peers or the media.
• Broach the financial conversation with your children knowing you don’t have to be a financial expert in order to teach them helpful lessons for the future.
• Sometimes these financial conversations even help parents take better control of their own financial situation, in order to be a strong role model for their children.

Not sure which financial lessons are most important for your children to be aware of?

Here are four key points in financial literary lessons to consider when you are preparing to teach your son or daughter how to build a solid financial future:

1. Earning Money

One of the first experiences your child will have when it comes to financial matters is earning their own money.

Whether you are offering a small stipend for jobs around the home or your child has a part-time job after school, earning money through physical or mental effort helps your child associate financial value to labor.

2. The Importance of Budgeting

The topic of financial budgeting can be brought up at a relatively early age. 

Whether your child earns an allowance or is paid from a job outside of the home, discuss how he or she can create a budget with the earnings.

• You may require the income your child earns to be used for discretionary spending – things like gas, going out with its friends, or buying a new clothing item.
• Be sure to help your child create a financial system where a portion of his or her money will go into savings, an emergency fund, their car or phone payment, etc.

Budgeting helps your children learn the value of money. 

It also educates them to develop a clearer picture of the time and effort involved in obtaining something of value or to make a major purchase in the future.

3. Saving Money

Saving money seems like such a simple topic. Yet saving money is often not discussed with younger generations. 

As young men and women between the ages of 17 and 25 make plans to move away from the family home, many are unprepared for the shock of monthly bills and being tied to contractual obligations, such as rent, phone, and monthly car payment contracts.

By helping your child to create a firm grasp on saving money and budgeting ahead of time, it can bypass “bill shock”, in addition to feelings of anxiety and confusion when he or she moves out of your home.

You can also teach younger children about saving money and help them create financial literacy at an early age through the use of a piggy bank, and older children through the opening of a savings account and setting up various financial goals.

4. The Difference of Needs vs. Wants

Because we live in a want-driven society, this is a crucial discussion to have with your child. 

As humans, we “need” food, shelter, clothing and security to survive – whereas our “want” is something we desire but do not depend on to live.

Educating your child about that “needs” should be built into their financial budget, whereas a splurge or extra money fund is what should be paying for the “wants” in life.

Of course, this can segue into a much broader financial discussion of why your child wants something. Possibly because his or her friends have it, or so your child thinks it will make them more likeable, etc. There are many helpful future financial conversations that can come from this topic which will benefit your children for years to come.

Takeaway

Create a plan to start having regular discussions about money with your child.

• Educating your children while they are young can help him or her to build a strong and positive relationship with money and creates financial literacy.
• It also instills in your child the value of earning money, budgeting, saving, and setting up a secure future.

For more information on how to teach financial literacy to your younger children, click here, and for teens, click here. Both links offer financial concepts and tasks that will help them develop the skills needed as they prepare for adulthood.

If you would like a customized plan and personalized financial guidance as you educate your children about money, please contact our experienced financial advisor team at Hudson Companies for a complimentary consultation.