Nothing about parenting is easy and yet, with at least most of the skills you need to role model, you have personal experience to draw on. You know a thing or two about communication, the importance of staying active, balanced eating, etc. from your own life experience. Sure, you have things to learn, but at least you’re not starting from zero. This is not always true of financial knowledge.
Less than half of adults in the United States have an estate plan which means less than half are planning properly for the future. Teaching your children financial literacy is impossible if you haven’t mastered the basics, yourself. This is why for many, passing down money management skills begins with improving their own.
Find Teaching Moments as You Build Financial Knowledge
Even if you’re among the minority with expert economic know-how, there’s always more for you to learn. Including your kids in your journey toward improved financial literacy brings the dual benefit of improving their economic future and showing them that learning never ends. As you build your skills, find teaching moments in which they can share.
Here are a few essential skills for every adult and child to master.
You should have a budget, and your children should, too. Tracking income and expenses is the first step to getting your finances under control, and setting goals is the beginning of attaining freedom.
Your budget will naturally be more complex than your children’s, but the mechanics remain the same. Provide your kids an allowance, have them dream up a few goals, and then teach them how to maximize their savings, so they can get there.
2. Smart Spending
Controlling how you spend your money is the central pillar of financial management.
When you’re out with your kids, and you decide to pass on take-out for lunch, turn this into a teaching moment and explain your thinking. Maybe you have a family vacation planned for the summer, and you want to save your eating-out dollars for when it counts. Or, maybe you’re tightening your purse strings in pursuit of paying off high-interest debt. Whatever the logic, share it with your children so that they, too, can learn smart spending.
3. Planning for the Future
Effective planning for the future means not only learning how to save, but building strategies for long-term financial security that accounts for life’s many unknowns. As you optimize your asset distribution and build your estate plan, include your kids in the process. Not only does this teach the importance of planning for the future, but it creates opportunities to thoughtfully address delicate family matters.
As your children grow up, talking to them about your estate plan gains an increasing importance. Beyond needing to learn to build their own plan, they need to understand yours so they can properly administer your assets when you’re gone.
Contact the Estate Planning Attorneys at Deliberato Law Center
To learn more about managing your finances and modeling good habits for your children, join one of our workshops—and bring the family! At the Deliberato Law Center, we’re passionate about planning for the future and are excited to support you on your journey!