Photo by Skitterphoto
Teaching kids about money
Sooner or later, parents will have to sit their kids down and have “The Talk.” No, not that one. The one that helps kids understand money, how to save it, and how to use it wisely. It’s a conversation that some parents put off. It is nonetheless directly connected to children’s future security – even success. According to Jonathan Shenkman, a financial advisor at Oppenheimer & Co. Inc., family conversations about money should start early, and they should start with an appreciation for everyday things. .”It’s far wiser to start with simply instilling an appreciation for the things one has: (a cell phone) computer, car, family vacations, a nice meal, new clothes, or any other luxury that may be in their lives,” Shenkman wrote in a June 29 column for Forbes. “Teaching kids to be grateful through casual discussion not only reinforces a positive attitude towards money but will also serve as a springboard for other financial related conversations.”
Here’s what else he recommends:
Ignore The Joneses Keeping up with the Joneses is among the easiest ways to derail distract kids from using money wisely. So teach kids to live within their means. “It’s far more important to live within your means, save money every year, invest it prudently, and focus on the things in life that give you true joy, like spending quality time with family and friends,” Shenkman wrote.
Know how credit works Teaching youngsters how and when to use credit – and how to use wisely is fundamental, said Shenkman. “It’s imperative to use credit cards correctly or it can be devastating,” he wrote in Forbes, “Think about credit card debt as a rapidly growing cancer to your financial health – Missing just a few payments on (a) credit card bills can lead to a large debt burden that can quickly derail you financially.”
See higher education as an investment Whether a child goes to college or not, post-high school education figures significantly into their ability to make and save money later on. “Many high school seniors choose a university-based on national rankings, campus life, or junior year study abroad options,” Shenkman wrote. “
In reality, college should be viewed as an investment towards a successful financial future – failing to view education as an investment can have the unintended consequences of saddling (youngsters) with an insurmountable level of debt that will derail their financial future.” Finally, by setting kids on the path to smart money management early, will serve them well all their lives.
“Many parents may feel overwhelmed when it comes to providing sound financial guidance to their children,” Shenkman wrote in Forbes. “In reality, merely understanding the above points may be enough to change the financial trajectory of many young (people), and lead them to build a successful financial future.”