By Tricia Lepofsky
You know your children have a lot to learn. Out of all the things you want to teach your kids (like kindness, respect, responsibility, a solid work ethic…), financial literacy should top that list. Why? Financial literacy is a skill that can make or break your child’s success as an adult.
Your kids will learn about money from someone. Don’t you want that someone to be you? Here are ways to get started.
1. Be an Example
If you want your kids to grasp the importance of handling money wisely, let them watch you make financial decisions and model what you want them to learn.
The number-one money habit children learn from their parents is spending habits—good or bad. If you spend money recklessly, your kids will see that. If you rely on credit cards to cover expenses or argue with your spouse about finances, they’ll accept that behavior as the norm. Your actions set a precedent, so be intentional about how you model money management to your kids and let their watchful eyes be a motivator to change any negative financial habits.
2. Start the Conversation
Since many areas of personal finance aren’t visible, sometimes a silent model isn’t enough. That’s why it’s vital to start the conversation. Talking to your kids about money regularly leads to kids who are more financially literate. It doesn’t have to be a long discussion. Just let them in on your thinking and decision making as you go about your day-to-day life. At the grocery store, explain why you buy the off-brand cereal; at the bank, explain why the bank keeps your money and why you only take what you need from the ATM. Let them watch you set up an automatic bill pay online. Explain that money moves from the checking account to the vendor on a certain day of the month until you go back into the automatic bill pay and stop it. These real-world scenarios help cement the whys and hows of money in your child’s mind.
3. Give Them Opportunities
For financial understanding to truly sink in, kids need to experience their own successes and failures. On a practical level, give your 5-year-old money to buy something at the store so they learn the value of different items and realize that, to obtain something like a toy, an exchange of money needs to take place. Try letting your 10-year-old figure out the cost of a new video game, plus tax, and help them save up allowance money to pay for it. Let your teenager buy their back-to-school clothes with a set amount of money. Seeking out financial literacy classes in your area or online is another great way to introduce the topic of money management to your children. As they get older, you may choose to guide them in investing some of their hard-earned money, letting them make some of the decisions. It may seem a little scary at first, but we all learn best by doing, so allowing your kids to make mistakes can teach them valuable life-long lessons.
We’re Here for You
You want what’s best for your children. Whether you’re implementing an allowance, putting money aside for college, or saving for other major milestones in your kids’ lives, you might be wondering if you’re doing an adequate job. There are countless resources out there to assist parents in teaching their kids about money—but where to start? We’d love for you to think of KFA Private Wealth Group as your go-to resource for applicable and beneficial financial guidance that helps you and your children find confidence in their financial future.
Would you like to discuss how we can walk alongside you as you set your kids up for success and save for your family’s future? If so, we invite you to schedule a complimentary introductory meeting by emailing tricia@kfapwg.com or calling 571-327-2222 to schedule an appointment.
About Tricia
Tricia Lepofsky is a financial advisor at KFA Private Wealth Group, a registered independent advisory firm founded on the premise of providing conflict-free financial and investment advice. With a background in music education and opera, Tricia transitioned to the financial industry to help people understand what their money can do and feel more in control as they work toward their goals. Tricia is known for her attention to detail and her dedication to her clients and their unique financial challenges. She is passionate about building relationships with her clients and partnering with them as they walk through life’s milestones, keeping them accountable and motivated to pursue their goals. While she serves a diverse range of clients, Tricia uses her background of 18 years in the Washington National Opera and Washington Concert Opera to specialize in serving hardworking, intelligent individuals who have a connection to the arts. In her spare time, Tricia loves to travel with her husband, Mark, hike trails along the Potomac River or in the Blue Ridge Mountains, and support former colleagues by attending live performances of operas and musicals. To learn more about Tricia, connect with her on LinkedIn.