HAVE YOU HAD THE FINANCIAL TALK WITH YOUR KIDS? WE’RE HERE TO HELP
Austyn Whittenburg
CFP? | Total Wealth Advisor | Podcaster | Creating Order Out Of Chaos |
Most parents want their children to succeed financially, but they often don’t realize that building a strong financial foundation does not happen by accident; it takes intentionality. Sometimes talking to kids about money can feel like a taboo topic, right up there with the birds and the bees, but a recent study by Cambridge University found that children develop money habits by the age of 7. (1) So whether your child is a toddler or about to graduate high school, this means the time to talk to your kids about money is now.
Your children will learn about money somehow, someway, and from someone. To protect them from learning harmful habits, you want that someone to be you. If you’re wondering where to start, here are some great tips to guide you in the right direction.
Talking to Preschool And Kindergartners
One of the most important lessons to teach your preschool- and kindergarten-aged kids is that “good things come to those who wait.” Learning the value of delayed gratification can have a huge impact on your child’s entire life.
An easy way to start teaching delayed gratification is to show your kids how to save money for toys they want.
And believe it or not, piggy banks are not the best way to do this. You want your child to be able to see their savings growing right in front of their eyes. So instead of a piggy bank, consider using a clear jar instead (or better yet, one of those clear electronic money-counting jars with digital displays).
The key to success when working with young kids (or children of any age, for that matter) is to make your money lessons fun. Play money-related games, do money experiments, mix in some friendly competition—figure out what sorts of activities capture their attention and concentrate on those.
Talking To Elementary And Middle Schoolers
Once your child reaches elementary and middle school age, you’ll want to start focusing more on the value of money.
One way to do this is to take your child shopping and explain your purchase decisions to them. For example, tell them why you choose a generic brand over a name brand (e.g., because it tastes the same, is cheaper, and leaves you with money left over to save for something special).
You can also teach your child the value of money by starting an allowance. If they have to work for their money, they’ll value it more. They’ll also learn to prioritize when deciding how to spend their earnings.
Talking To High Schoolers
By the time your child reaches their teenage years, they should now have a solid foundation in money management. But your job isn’t done yet—there’s still a lot left for them to learn!
If you haven’t already, make sure to open a checking and savings account for them. This will help you teach them how interest works. Once they get the basics down, you can transition into more advanced lessons, such as the power of compound interest over time (and how their savings can snowball if they start early).
One of the best ways to help these lessons sink in is to encourage your child to get a part-time job. That way, they can experience everything firsthand.
Lastly, don’t forget to teach them about credit. You might think credit cards aren’t for kids (maybe you got into trouble using credit cards and don’t want the same for your children). But if you don’t teach them how to use credit cards wisely, who will?
Before you release your kids into the “real world,” they should understand that they can only spend what they have. If you open a credit card for them while they’re living with you, you can train them to build credit while paying off their balance each month.
The Most Effective Way To Teach
You can teach your kids all there is to know about money, but if you really want the lessons to stick, leading by example is essential!
But what if you don’t know everything about the best ways to handle and invest your own money? Enter financial advisors—they exist to teach non-financial experts the best ways to grow and protect their wealth. By working with a financial advisor, you can maximize your finances and talk to your kids about money at the same time.
We at Whittenburg Wealth Partners want to partner with you to equip your children for a secure financial future. If you’re interested in more guidance in talking to your kids about finances or in sharpening your own financial plan, easily schedule a no-fee, no-obligation virtual appointment or contact us at 801-839-7050 or [email protected].
About Austyn
Austyn Whittenburg is a wealth planner and partner at Whittenburg Wealth Partners, a family-owned and family-operated financial and wealth management firm located in Salt Lake City, Utah. Austyn has 7 years of experience as a wealth planner and spends his days helping business owners, emerging successful families, and their ensuing generations simplify their financial lives and discover meaningful solutions. Austyn received a Bachelor of Science in Finance from Brigham Young University and holds the Certified Financial Planner? (CFP?) and Certified Business Exit Consultant (CBEC?) credentials, his FINRA Series 7 through LPL Financial and 66 registrations through LPL Financial and Stratos Wealth Partners, and his life, health, disability, and annuity insurance licenses. Austyn is active in his community of Herriman, Utah, where he resides with his wife, Ciera, and two young sons, Grayson and Graham.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.
Securities offered through LPL Financial, member FINRA/SIPC. Investment advice offered through Stratos Wealth Partners, Ltd., a registered investment advisor. Stratos Wealth Partners, Ltd. and Whittenburg Wealth Partners are separate entities from LPL Financial.
____________