Three Ways to Teach Kids Important Financial Skills
April 21, 2023
"Start ‘em young!” is good advice for many of the critical life skills we’d like our children and grandchildren to learn as they grow up. Among other things, we want them to learn how to:
- read, write, and speak clearly.
- be kind and patient with others.
- set goals and work hard to achieve them.
- take responsibility for our actions.
- respectfully disagree with others.
- manage conflict, anger, fear, and sadness in healthy ways.
Children learn many of these skills by example, with adults acting as role models and instructors for young people. Building financial skills is no different. Little ones learn money skills young, beginning as early as age three, often with parents or grandparents as their main source of informal education.
In the work I do as an advisor, many of the client families I serve are business owners. Some are active in the business; some are retired. They’ve spent their lives building and growing successful businesses, often coming from humble means. They’ve achieved more than what they believed was possible, but they still have worries. One of their biggest concerns is preparing future generations for what’s ahead. They don’t have confidence that their children or grandchildren will be ready and able to handle a sizable inheritance, managing a family enterprise, or both. In addition to their assets, they want to pass down their values. They ask me, “What should I do? When should I get started?” Of course, my response is, “Start ‘em young!”
Whether you’re a business owner or not, here are three ways to start talking about money and building financial skills with your children or grandchildren while they’re young:
1. Talk about your workday and your role in the company on a regular basis. How many times have you picked up your child or grandchild from school and asked them how their day was? You’re lucky if you get a half-second of eye contact and a huffed, “Fine,” before their eyes are glued back on their phone or tablet. Ditch the screen on the drive home and flip the script. Tell them about what you did at work that day: What kind of product or service does your company provide? What questions demanded your attention? What problems did you solve? What did you not get to? Who did you interact with?
2. Involve them in your corporate family, community, and volunteer events. At Foster Group, we want our children and grandchildren to see what we do, not just hear about it. We host a family ice cream truck day in our building’s parking lot in July and office “trick-or-treating” at Halloween. We also host a family fun day at Adventureland Park and a handful of volunteer events throughout the year. Normalize your children or grandchildren seeing your work environment. Let them experience what a professional working environment looks like. If you need helpers at a community event, enlist your child or grandchild to help pass out water bottles or t-shirts. Show them, don’t just tell them.
3. Include them in your family giving. Generous parents and grandparents have two amazing giving motivations: they want to demonstrate philanthropy/set an example for their children and grandchildren, and they want to support causes that have personally touched them or their families. But how many of us talk about our giving with children or grandchildren? Here’s an easy way to start. First, assign a dollar amount to each child or grandchild, maybe their age, multiplied by $5 or $10. Inform them that they will be responsible for choosing a charity to receive their donation. Next, give them a few weeks to do some research. Finally, regroup as a family and have each young person share which organization they chose and why. Repeat annually for best results.
Ashlee Vieregger, JD, CFP, CFTA. Learn more about Foster Group.
Investment products are: Not a deposit or other obligation of the bank and not guaranteed by the bank, Not FDIC insured, Not insured by any Federal Government Agency, and May lose value, including possible loss of principal. The scope of any financial planning and consulting services to be provided depends upon the terms of the engagement, and the specific requests and needs of the client. Foster Group does not serve as an attorney, accountant, or insurance agent. Foster Group does not prepare legal documents or tax returns, nor does it sell insurance products. Foster Group is not engaged in the practice of law or accounting. All investment strategies have the potential for profit or loss. Asset allocation and diversification do not ensure or guarantee better performance and cannot eliminate the risk of investment losses. PLEASE SEE IMPORTANT DISCLOSURE INFORMATION at www.fostergrp.com/ disclosures. A copy of our written disclosure Brochure as set forth on Part 2A of Form ADV is available at www.fostergrp.com