Are you teaching your kids the value of a dollar? 415 Group Partner Raymond Maynard, CPA, shares several strategies for raising children to be financially independent.
I have four kids, two sets of twins. The older two are going to be twelve and the younger two just turned seven. When I read this article, I asked myself, ‘Am I doing the right things for my children? What could I be doing differently?’
I’ve tried several of the ideas mentioned here. A piggy bank is an essential start for younger kids, before opening a savings accounts. With my older two, I actually took them to the bank, and we toured the vault. That reinforced the concept of depositing money. I’d also recommend offering an allowance for chores. A good rule of thumb is that their allowance should be one dollar per year of their age. So, a seven-year-old would receive seven dollars per month.
Monopoly is also a great teaching tool to help them understand financial concepts in the real world, like mortgages, rent and taxes. My kids have grown to love that game, it’s become a fun family tradition for us.
The biggest mistake I see parents make is not talking to their children at all about money or finances. Money just magically shows up, and the children have no concept of what it takes to earn money, make a budget and prioritize their spending.
Teaching your children these concepts at a young age will go a long way later in life. At 415 Group, we can help you secure your financial future for the next generation, whether it’s through college planning, estate taxes or business succession planning. Contact your financial advisor to get started.
If you have children (or grandchildren) you have an opportunity to give them a jump-start on their journey to becoming financially responsible adults. While teaching your child about money and finances is easier when you start early, it's never too late to impart your wisdom. Here are some age-relevant suggestions to help develop a financially savvy young adult:
Knowing about money — how to earn it, use it, invest it and share it — is a valuable life skill. Simply talking with your children about its importance is often not enough. Find simple, age specific ways to build their financial IQ. A financially savvy child will hopefully lead to a financially wise adult.