The Important Things I Taught My Kids About Money

| February 27, 2019
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Parenting is hard.

After all, the way you raise your kids dramatically influences the person they become. Yes, they will learn many things in school. If you aren’t an algebra whiz, history buff, or science geek, your child isn’t doomed. But as you’ve likely realized, the most important life lessons are often learned at home.

These lessons—like how to responsibly manage money—are ones you better not mess up. And if there’s one thing I want to teach my kids about money, it’s the value of a dollar. Here are five ways I do it (and how you can too).

I Encourage The “Save And Splurge”

If there’s one thing that will teach my kids to value money, it’s encouraging them to work hard and save for the things they want. If they earn it, I let them spend it on whatever they want. I know that if they put in the effort to save up, they’ll be sure to “splurge wisely.”

I Allow For Mistakes

This goes along with splurging wisely. I don’t control how my kids decide to spend their hard-earned money. They can buy whatever gives them the most satisfaction—even if I don’t think it’s the best decision. Making mistakes and learning from the consequences is the most effective way to learn. If I controlled how they spent their money, what lessons would that teach them? It’s better for them to learn from mistakes as a child than as an adult on their own.

I Talk About Cost Of Living

Do your kids know how much it costs to live? Talking with them about transportation costs, mortgage payments, and vacation expenses might not be your idea of kid-friendly conversations, but it will definitely help them appreciate the value of a dollar—especially if they are working to save their own money.

I Let Them Practice Taking Care Of Money

Whenever we go to an outing or event, I like to give each of my kids a bit of cash to carry around. The idea is to teach them to keep it safe and guarded. If they take care of it, they can buy themselves something during the outing. If they lose it, they’re out of luck.

I Review The Performance Of Their Portfolios With Them

Most people enter adult life not knowing how stocks and investment accounts work. Not my kids! I’ve opened a stock account for each of my children, and we sit down for “performance reviews” on a regular basis. I explain to them what they own, why we chose to invest in a particular company, and how that company’s recent performance has affected the value of their investments.

This is an invaluable exercise for kids to do.

Lead By Example

The thing is, in order to teach your kids how to value money and invest, you first need to do it yourself! After all, leading by example is the best way to teach. That said, if you’re interested in working with an expert to design a personalized financial plan to reach your goals (and show your kids), we at Fiduciary Wealth Management can help. To get started, schedule a phone call now!

About Rocklin Senavinin, CFP®

With nearly 20 years of experience in the financial planning industry, Roc has dedicated his career to helping individuals live comfortably in retirement and enjoy the assets they have spent their career building. He is co-founder of Fiduciary Wealth Management, a fee-only registered investment advisory firm in Little Rock, Arkansas. As a CERTIFIED FINANCIAL PLANNER™ professional, he has advanced training in the holistic process of creating a personal financial plan that addresses a person’s comprehensive needs for the short and long term. To learn more, connect with Roc onLinkedIn or visitwww.fidwm.com. If you have questions, feel free toschedule a phone call using this link.

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