Are you teaching your children about finances? Do your kids know how you feel about money and what your spending and saving priorities are? If not, this is the perfect time to start a conversation with them.
Everyone has their own unique money story that’s largely shaped by childhood experiences. How you handle and talk about money will affect how your children view finances and manage their money as they grow up.
At Guiding Wealth, we know that it can be difficult to pass good money habits on to your children, especially if your own upbringing included financial secrecy, guilt, or shame. But you can break that cycle and help your children create a healthy view of money.
Parents Shape Their Children’s Financial Perspectives
If you feel anxious about your child and money, you’re not alone. Many parents worry about this, especially if they see their kids reliving their own financial issues, like hiding spending or avoiding conversations about money.
But being aware of how your child thinks about money is the first step toward helping them. You play such an influential role in your child’s life, and that means you can help shape their financial priorities and money management skills.
Intentional Conversations Are Effective
No matter how old your children are, you can talk with them about money. If you start those conversations while they’re young, you can keep developing the topic as they grow older. The Four Money Bears by Mac Gardner, CFP®, is a fantastic book for younger children. It breaks money down into its four basic functions: spending, saving, investing, and giving.
Another great option is to allow your children to see (and maybe even affect) your household budget. Start simple, like talking about how you budget for groceries or whether you put money in a savings account. As your kids grow, you can expand the conversation to include retirement planning, investing, and charitable giving.
Even if you didn’t talk about money when your children were young, it’s never too late to start. If you have older children, they’re probably already thinking (and maybe worrying) about money.
They see the news stories about the market dip and inflation and housing prices, and they’re probably wondering how you’re going to navigate those things. By bringing them into the conversation and engaging them in your own financial decision-making, you can help quell their fears and set a good example of wise money management.
You Can Build Your Child’s Financial Confidence
How can you empower your children to be successful with money? Let them start making their own financial decisions.
If you have young children, you can give them an allowance or pay them for chores. Allow them to save or spend their money with as much input from you as their age dictates. A younger child may want to purchase a toy, while a teenager may be thinking about their own car or experiences with friends. Talk about the pros and cons of spending now vs. saving and earning interest.
The exact details of what this looks like will depend on you, your children, and your unique situation. Younger children will rely more on your input, and you can give your kids more financial freedom as they mature. With teens, you can start talking about credit and how to make good decisions in that area. When children truly have a say in managing their own money, they can build good decision-making skills and financial self-confidence.
Create the Right Narrative for Your Child’s Financial Success
How do you want your children to perceive your own money priorities? Once you know the answer, you can make sure you’re living the financial values you want your children to adopt. Even if you struggle with financial anxiety and decision-making, you can change that narrative for your children. When you initiate financial conversations and give your children the chance to manage their own money, you set them on a path to success.
If you don’t feel confident in your own finances yet, Guiding Wealth can help! Whether you want help planning for retirement or just managing your cash flow better, we’re here to support you.
A Certified Financial Planner™ can help you identify your financial goals and develop a clear path to reach them. To get in touch with our team, call 214-810-3835 or schedule a consultation online.