Why financial literacy matters for the whole family
When you’re the head of your household, it’s easy to assume that you’re the only one who needs to tackle financial matters. But whether you’re parenting alone or with a partner, it’s important to make sure everyone in your home has basic financial literacy. That means understanding the value of earning and growing money.
Read on to learn why financial literacy matters for the whole family!
Start teaching money habits early
You want your kids to make informed financial decisions as they head toward adulthood. For parents, that means stepping in to set a positive example and offering some guidance along the way. After all, kids will notice how adults talk about money habits and budgeting. Helping kids grasp the importance of saving part of their allowance or waiting for sales and discounts, for instance, can help shape their financial knowledge.
Maybe your child is hoping to purchase a new set of headphones or a bike. Parents can demonstrate the value of saving money from birthday gifts or encourage their children to earn money. Mowing lawns or cleaning rooms can be excellent chores for kids to complete in exchange for a payment. Parents can help their kids set savings goals and learn the value of hard work in the process.
Talk openly about money
Money conversations can be tense, but it doesn’t have to be that way. Talking about finances and budgeting as a family can help involve kids in conversations that set the tone for their future. Parents may want to limit grocery or restaurant expenses, for instance, to save money for college funds or a new family car. Talking through what that looks like can help kids see what goes into prioritizing needs over wants.
Kids tend to be unaware of everyday expenses, so open conversations about finances can help them see how money allows their household to operate. Kids can learn about utility costs, car insurance, and mortgages. By being transparent, parents can build financial literacy skills, and families can nurture a team mentality.
Discuss investments
Don’t be shy about broaching the topic of investments with children. Even if investments seem like an adult concern, kids can absorb critical information that can help them lay a better foundation for their financial future. Everything from retirement plans to investment returns and compound interest can contribute to meaningful conversations.
You may discover your child has an aptitude for financial understanding or a strong interest in that area, as well. Consider exploring financial career paths with them, including relevant coursework and credentialing processes. The Series 65 exam difficulty may be high, but passing this exam enables financial professionals to serve as investment advisors. And kids and families can apply the content from this exam to financial moves in their own lives.
Build a better financial future
Ultimately, developing financial literacy on matters of long-term investment strategies, credit card payments, and emergency budgeting can help families feel more confident about the future. Make a habit of weaving money conversations into day-to-day life to help kids of all ages start to build a healthy relationship with money. Encourage sound saving and investing habits, and determine family financial goals together. You’ll improve knowledge, trust, and resiliency.
