4 Practical Ways to Establish Financial Literacy in Your Family
Your children and grandchildren learn by watching you. They see how you engage with others, how you spend your time, and what you talk about. With a little thought, you can have a profoundly positive effect on their lives. In light of April being Financial Literacy Month, here are some practical ideas for teaching financial literacy to the next generations that we’ve picked up from our clients over the years.
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Money Management for Your Children and Grandchildren
Everyone knows what a budget is in principle, even if they were never taught how to budget. Budgeting and money management are great skills to teach at an early age, and there are endless opportunities to teach young children how to steward money well and wisely.
One of our clients has several young grandchildren, and she is intentional in spending one-on-one time with each of them. On their outings, she gives them a small “budget” for the day and her grandchildren can choose the day’s activities. For example, if they go to the park and get ice cream, they will have some money left over as “savings” to use on their next outing. If they see a movie and get popcorn, they won’t have enough in their budget for lunch too. These days provide quality time and a chance for her grandchildren to learn how to make decisions within a budget.
Generous Giving For Your Family
Young children are taught to share early on, but that isn’t usually what we would call genuine, selfless giving. One couple that works with us has grandchildren ranging from kindergarten to young adults. Each year they give each grandchild one hundred dollars in October. They ask
them to give the money to someone in need before Christmas morning. The only thing the grandparents ask for in return is a letter sharing where they gave their gift and why.
This simple Christmas gift idea helps this couple’s grandchildren learn about selfless giving as they seek out needs and find something they are passionate about.
Another client told us that they set up a foundation through the National Christian Foundation for their three children and their spouses. Each year they put several thousand dollars in each foundation, and they expect their children to give it all away by the end of the year. At the end of the year, they share about the nonprofits and ministries they supported and their experience in giving.
Money Management For Your Family
Intentional communication and transparency are keys to passing on our financial values. Be open about your mistakes, and share your successes. The lessons you have learned over the years will be a source of wisdom to those around you.
It’s often helpful to have a third party involved in financial conversations. We frequently join clients for family discussions about financial and estate planning. Your family will be more open to changes that affect their inheritance if they understand the thought behind the changes and have an opportunity to ask questions. One of our clients even invited their advisor to stop by the beach while their entire family was on vacation. This gave their family extended time to discuss and consider their family’s impact on the world.
To learn more about communicating your financial plan to your family, read this blog post!
Other clients have encouraged their children to read books with them or go to conferences and seminars to continually learn about stewardship and money management.
Intentionality Creates a Lasting Impact
For each of these stories we share from our clients, there are hundreds more purposeful engagements to encourage stewardship, wise financial decisions, and generosity. Promoting financial literacy for the next generation isn’t just about making sure your family knows all of their investment options; it’s about what we do and why we do it.
Wealth is about more than finances and profit. You can use wealth to create a lasting impact on individuals, in your community, and around the world.
To learn more about how you can use your wealth to make an impact or learn more about values-aligned investing, contact us today!