One of my favorite quotes is by Bradley Vinson, and it goes like this: Money is a tool. Used properly it makes something beautiful – used wrong it makes a mess!” This begs the question, who were some of the people that influenced your experience and path with savings and investing? For me, a large part of my inspiration in the love of money matters came from my dad and grandpa. I was so grateful for their influence and the impact they had on me at such a young age without even knowing it! The information I have come to learn about smart money matters will always be relevant. Today I am posing the question, how do we get our children/grandchildren/nieces & nephews interested and excited to learn about savings, investments…?
According to a 2020 study by The Atlantic, just 17% of American families with an income over $100,000 shared with their children how much they made and their net worth. Why is this topic of money so taboo? How can we expect the younger generation to learn smart financial habits without sharing financial information and nuggets throughout their lives? A good start would be introducing them into these conversations while they are developing their concepts about money and finance. I am going to highlight two great ideas to start these conversations!
First, one of the advisors here at The Joseph Group introduces money and financial concepts to his kids by laying out options for them to use their money. With any amount of money we earn, we can either spend, save, or donate. I have seen many parents or grandparents make this learning tool into a fun game by creating little jars with their children with these three labels. When presented with an opportunity to choose, the kids can put money in any or all of these jars. This gives them the freedom to choose and start thinking whether or not to spend, save or donate.
Second, many of our advisors often state that money is just a tool to help our clients live their great lives. The concept of spending, saving or donating can open up all kinds of additional questions with children. This goes hand in hand with our storyboard concept. Having a goal associated with the money will inspire them to work towards something bigger! In addition to this motivation to save or donate, it provides a clear picture of the future of the money and provides confidence in saving and giving.
So, how do we start to implement these ideas? Start talking with them, encouraging them, and empowering them along their money journey. These conversations about saving and goal setting will be the basis of how they look at money in the future. In addition to having these conversations, there are programs specifically geared towards educating parents and kids on a financial journey. Dave Ramsey has a well-reviewed and respected program called Financial Peace Jr. that you can begin with your children as early as age 3. This kit provides a step-by-step guide for parents, an activity book, spend, give, save envelopes, and so much more.
I encourage you to plant these seeds within your children and grandchildren at a young age so it continues to grow throughout their lifetime. I’m so glad my dad and grandpa did!
Written by Theresa LeChard, Wealth Advisory Associate