“What is your first memory regarding money?” It’s a question we often ask our clients. My first memory is my grandmother asking my 5-year-old self to go look at the television and tell her if the screen was green or red. She always had the business channel on, and she wanted to know if the stock market was up or down that day. My dad also happened to be an accountant, so I was taught how to balance a checkbook by the time I was 10. I was definitely raised in a finance conscious family.
Money can be a difficult thing to talk about with your kids. If you talk about it too much, your kids might get a distorted view of our family’s wealth or they might start to unnecessarily worry. If you talk about it too little, they might never learn the importance of saving and thinking long term. But how you speak and teach about money in your children’s early years lays a foundation for how they relate to money for the rest of their lives.
Our advice is to start small. Here are 3 easy ways that parents can teach their kids about money.
- Let your kids help budget for a family vacation. When kids think about a vacation, they picture endless entertainment. Putting a value on what all those rides, shows, meals, and souvenirs cost can help youngsters set realistic expectations. As the leftovers from your budget number get a little smaller, your kids will see how splurging at the gift shop could be the difference between an extra day in paradise and coming home early.
- Institute a “parent match”. Just like an employer will often match an employee contribution to a retirement plan, offer something similar to your kids. If your kids contribute money towards a savings or investment account that they are not allowed to withdraw from for a certain period, offer either a fixed amount or percentage “parent match”.
- Emphasize stewardship over ownership. The Apostle Paul in 1 Corinthians 4 says, “What do I have that I did not receive?” Psalm 50 says, “Every beast of the forest is the Lord’s, the cattle on a thousand hills.” God is the owner of everything. And if God is the owner, that means that we are the steward. As stewards it is our responsibility to use God’s money in a way that honors Him.
When your children get a little older, consider bringing them into our office for a friendly money chat. We can help you introduce your kids to basic saving and investing principles and get their relationship with money started out on the right foot.
Investment advisory services offered by OneAscent Wealth Management, LLC, a registered investment advisor with the United States Securities and Exchange Commission.