Parents have lots of “timely conversations” with their kids, at key points while they’re growing up — but what about conversations about money? Eventually, they have the talk about plans for the future – career plans, ideas about college, and financial planning. Where does a parent even start on this path?
Think about the most financially successful people you know in life. Chances are, those people didn’t get to where they are simply by figuring out how to save more of their income; they also figured out how to earn more as well. Of course savings are good, but there needs to be a comfortable balance between savings and ways to increase your earning power.
“Get alongside the young person and work with them to develop a plan that will help them earn the money they need, for whatever it is that they want. In that way the process of earning and saving become synonymous.”
Maybe the most important bit of advice in here is to “get alongside” your kids – they need your time and attention in learning how to think about and manage money. Remember, you can’t replace your time and attention with stuff.
As parents, most of us want to teach our kids how to avoid falling into the same traps that we did, but Charles Schwab & Co. research shows that only 34% of parents taught their kids basic money skills like balancing a check book and 29% taught them how credit card fees and interest work. According to the same study, 70% of parents taught their teens how to do laundry — I’d strongly argue that these are equally important life lessons.
Just to be clear, we’re not talking about the money-for-chores trade here. It’s the money as motivation method that gets experts going.
Eileen and Jon Gallo, the authors of “Silver Spoon Kids,” worry that children who receive financial incentives for good grades or behavior will grow up to be the sort of adults who try to buy friends and swap money for love.
You can teach your kids how to deal with money – but it’s going to take some time and attention – don’t be afraid to have conversations with your kids about money. Talk about their money, talk about yours – just get them talking about money, and they’ll be much better-equipped to handle their money in their adult lives.