Moolah, dough, greenback, bread, dollar, buck, money…
Whatever you choose to call it, we all want it and we all need it; but do we all really know how to manage it? And what about our children? What tools have we given them to be financially successful in their lives?
From the moment they take their first breath our children begin learning the necessary fundamentals that will guide them through life. From crawling, walking, and talking to reading, writing and arithmetic, our children are like sponges absorbing the information that is poured into them. But have we, as parents, put equal emphasis on the financial literacy of our children? Sadly, many parents are missing opportunities to teach their children about money.
According to a recent article by Ken Tysiac, Senior Editor for News at Journal of Accountancy, many children aren’t learning much about money from their parents. A U.S. telephone survey conducted by Harris Interactive for the American Institute of Certified Public Accountants (AICPA) determined that, “three in 10 parents never talk to their children about money or have had just one big talk with their children on the subject.” Also, “just 13% of parents surveyed talk daily with their children about financial matters.”
It was also noted that the parents who participated in the survey were more likely to have talked to their children about other important topics such as manners, eating habits, grades, drugs, alcohol, and smoking.
The article also includes some practical tips from the National Financial Literacy Commission including:
- Start early. As soon as children are able to express a want, discuss basics like delayed gratification that is the foundation for budgeting and saving for a goal. Require children to save some of their birthday cash and money earned in after-school jobs. Give them small jobs to earn an allowance to pay for toys or other wants. Make saving fun by giving them a grocery list, and have them clip coupons and comparison shop by reviewing store fliers. Split the savings with them to reward their effort.
- Speak in their terms. A child might not care about money for college and may be more interested in money to buy a toy or spend with their friends. Create teachable moments around things your children care about. Also, show them the statement for their college savings account to build an understanding of compound interest and saving toward a long-term goal. The real learning will occur when your child tries to figure out how to earn and save for a toy or other item you decide not to purchase for them.
- Repeat often. The more you discuss good financial habits, the more likely your child is to make them a part of their daily life. During dinner, talk about saving for a big purchase, such as a family vacation, and how it might affect the budget. Show them your pay stub to talk about taxes and saving for retirement, and review their savings account and college account statements with them.
- Walk the talk. No matter what you say to your children about money, your actions are even more important. If you cave in easily when they make a fuss over a toy at the store, you will have difficulty convincing them to delay gratification and stick to a budget.
FamilyMint is dedicated to helping improve this trend by providing a fun and educational way for children, with the help of their parents, to manage money and build financial literacy through an easy and intuitive award-winning online money management application. FamilyMint has helped thousands of parents raise money-smart kids by teaching children about financial goal setting, and forming the types of financial habits and behaviors that will lead to financial success.
FamilyMint also offers a unique co-branding Partner Program that provides financial institutions, financial advisors, CPAs, insurance agents, and other organizations the opportunity to provide a highly interactive and ongoing educational experience to their clients. For more information, contact FamilyMint Partners.
For the full article referenced above, see: http://www.journalofaccountancy.com/News/20126206-financial-planning.htm