One of my goals last year was to start opening the dialogue about personal finance with friends and family. All too often people avoid talking about money for various reasons. Maybe they don’t know much about it themselves and don’t want to look silly. Perhaps they are ashamed of their finances and don’t want people to know their struggles. There are a plethora of reasons why people don’t discuss money, even though its what drives much of our behavior and is the easiest type of information to share in order to avoid costly mistakes. The failure of people to talk about personal finance is the reason why generational poverty, instead of wealth, is so rampant.
Recently I had the pleasure of speaking with several amazing women at a “Dinner and Desserts” gathering. The hostess wanted to encourage women of various ages, experiences, and backgrounds, to have healthy discussions about whatever our hearts desired. Surprisingly, the topic of money emerged. One of the women stated that her parents was of the generation that didn’t know much about finances, so they couldn’t teach it. They had to learn on their own. While that may have been a barrier back then, we can no longer use that excuse in the Internet Age.
With so much information available – blogs, podcasts, the internet – it is hard for parents not to learn what it takes to be financially successful. Knowledge is at our fingertips and it is up to us to share that with kids in order to embolden them for the future. Additionally, let’s not forget the most powerful teaching tool available, our own personal experiences.
Some may argue that children don’t need to be burdened with adult issues such as money and personal finance. I beg to differ. The earlier kids learn the basics, the better prepared they are to tackle life’s obstacles. In fact, you may be surprised to see how they may pitch in to help save which may get the entrepreneurial spirit started in them as well.
As the conversation continued, many shared the same sentiment – “My parents didn’t teach me about that.” We as single parents MUST inculcate healthy financial habits into our kids, with the same fervor and intensity as we push the power of education along with the benefits of healthy eating.
In a recent post in our SingleParentSaves Facebook group (join by clicking here), members were asked to share money lessons they learned as children. How enlightening! It seems many were taught that they should save, but what about the why? Investing lessons? Nope. The benefit of charitable giving? Nada. How heartbreaking!
A well rounded financial plan involves four fundamentals – giving, spending, saving, and investing. If children are to be given the tools they need to end the cycle of financial struggling, generational poverty, and going into debt to “keep up with the Joneses,” then we must be open and honest with them as soon as possible.
What better gift to give your kids than the gift of knowledge? However, too little knowledge is crippling. Don’t just teach them about saving, they need to understand the benefits of investing. Teach them about the differences between needs and wants, but also that its OK to take care of themselves. They need to know that there is more joy in giving than receiving, so being charitable is essential. Teach them to start saving as early as possible to take advantage of compound interest. Show them how creating a budget based on percentages will make sure they know where all of their money is going. Tell teens they can open a custodial Roth IRA as soon as they begin earning income. Teach young kids lessons on income, expenses, and prioritizing their money by paying them for chores. Whatever you do, teach them now!
Children are resilient and need to know as much as possible from reliable sources, such as you, now more than ever. They can access all kinds of information online, valid or not, which can cause serious harm if not given in the right context. Have candid conversations with your kids and reap the benefit of knowing that you laid the foundation for them to be financially free for life. You can do it and your kids are ready to learn.
I challenge you to talk to your friends and setup a “desserts and discussion” event to share knowledge with people you know and trust. Let us know what you plan and how it goes in the comments below. Join the SingleParentSaves Facebook group to stay engaged and active with fellow savers. Together, we can end generational poverty and begin the cycle of generational wealth.
Happy Saving, Live Well!