It’s time to talk to your kids about money
By As parents, we all have the best of intentions as we raise our kids. We try to instill good health, hygiene, nutrition, study, and work habits, and we hope that they embrace those lessons and carry them into their adult lives.
I’ve written before about the importance of talking to your kids about money. I believe that it’s never too early to start that conversation. My oldest was 12 when I wrote that first article. The strategy we used was to give them $1 per week for their age — so $5 for a 5-year-old and $15 for a 15-year-old — to do their chores. They use that money to pay for basic requirements, such as Mother’s Day cards, Christmas gifts, etc. Outside of that, they could spend that money however they wanted.
Fast-forward to today, and the oldest is 19, on his own as a sophomore in college and working multiple jobs. He’s paying his bills and has short-term and long-term savings for major purchases. He recently bought a car from a dealership on his own and was approved for a $20,000 loan based on his credit history. Even the dealership couldn’t believe it!
But before you think I’m bragging about my parenting skills, know that this stuff comes naturally to him. My 16-year-old, whom we raised similarly, is still a work in progress. He blows through his allowance way too quickly. But I’m confident that he’ll learn quickly once he starts driving and realizes that he needs gas money to do things with his friends. That’s a major teaching moment.
Ultimately, as parents, we wish for our kids financially — to be independent and make choices that give them less stress, not more. We want them to work hard, save, and be charitable. I have regular one-on-one conversations with my kids about how their lives are going and what plans they have for the future. Those discussions aren’t meant to evaluate their plans — they change all the time — but rather to instill in them that it takes some discipline to follow through with what they want to do in life.
This is a lot like the relationship we have with our client families. What do you want to do, and what will it take to get there? Are you saving, spending wisely, giving, and leaving a legacy? If you want to learn more about building that relationship with us and with your children, get in touch today.
Article by David Smyth, Senior Partner at Family Financial Partners — a financial services firm in Lexington, Kentucky.