Provided by the Chesterton office of Benjamin F. Edwards & Co.
As a parent, have you ever found yourself frustrated by a child’s request for yet another toy or gadget? Kids can be notorious for always wanting the next new thing, so there’s an almost universal need to teach kids good money habits. This is common among all parents – from the wealthy, to the middle class, to those struggling to make ends meet. With advertising, peer pressure and the like, kids are exposed to many material temptations.
Social media can add to this when your child’s friend posts that he just got the hottest game or she received a new iPhone. Kids typically know within a day what their friends received for Christmas and Hanukah because of Instagram posts. Parents need to combat this with their own advertising campaign of good spending and saving habits. Here are some tips to help you get started:
Don’t be intimidated. You don’t need a PhD in Finance to be able to nurture financially responsible kids. Your family spends money every day, so you are surrounded by plenty of teaching moments. And you probably have made your own money mistakes that can provide a great learning opportunity to share with your children.
Consider the example of a mom who had a learning experience at the grocery store. Among other items, she purchased a container of pre-cut fruit salad. She didn’t think to look at the price when she put the item in the cart, and when she checked out she was surprised by the price of the total grocery bill. On closer inspection, she discovered the fruit salad was the culprit. To make a teaching moment out of it, she told her daughter that she had made a mistake and should have looked at the price when she put the item into her cart. If she had, she probably would have reconsidered the purchase of the fruit salad.
Use your time wisely. It’s usually a good idea to talk to your children when you have their attention – which can often be in the car or at dinner. During car rides to soccer practice, you can hold court on a number of subjects. Don’t shy away from financial topics; let them be one of the things you discuss. As an example, one family decided not to take a Spring Break trip one year, and they talked about why other families were going to Florida and they weren’t. The parents were honest with their children and explained that they didn’t have unlimited resources and they were saving their money for other things. Conversations like these show children a real life example of the benefits of saving.
Let them make mistakes. Finally, don’t interfere with their money decisions. Refrain from so-called “helicopter parent” behavior. If they want to buy a useless toy with their own money, let them do it – even if you know it will likely break or they’ll get bored with it within a week. Learning from small mistakes can help them avoid the big ones, and hopefully they’ll get smarter about their money decisions over time.
Financial literacy is about raising kids who grow up to be independent, responsible adults with good habits that last a lifetime. Take the time to teach these habits early and weave small lessons into your family’s daily life.
This article is provided by the Chesterton office of Benjamin F. Edwards & Co., and was prepared by or in cooperation with Benjamin F. Edwards & Co. The information included in this article is not intended to be used as the primary basis for making investment decisions nor should it be construed as a recommendation to buy or sell any specific security. Benjamin F. Edwards & Co. does not endorse this organization or publication. Consult your investment professional for additional information and guidance. Benjamin F. Edwards does not provide tax or legal advice.
Benjamin F. Edwards & Co., Member SIPC and FINRA
2019-2106 Exp. 10/31/2021