Our children need money mentors. With consumer debt skyrocketing and the cost of housing, education, and health care increasing, younger generations face unprecedented challenges to achieving economic security and financial independence. Helping our youth to learn effective money management skills and to adopt good financial habits and attitudes is more important than ever. So, what can you do to help improve the financial future of your children, grandchildren, nieces, and nephews? Here are suggestions and resources to get you started.
Set an example. First and foremost, examine your own money beliefs and behaviors and then take action if necessary to get your financial life in order. An excellent handbook for reaching this goal is You and Your Money, by Lois A. Vitt and Karen L. Murrell. Always remember that nothing is more effective in guiding the younger generation than a powerful role model.
Be aware. Stay alert for teachable moments to share your financial expertise and wisdom. Very few topics affect us on a day-to-day basis like money does, so there are endless opportunities to provide mini financial lessons via word and example. A wonderful resource for parents (and other caring adults) is The Financially Intelligent Parent: 8 Steps to Raising Successful, Generous, Responsible Children, by Jon and Eileen Gallo.
Put it on the calendar. In addition to impromptu conversations about money, William Anthes, past president of the National Endowment for Financial Education (NEFE), recommends establishing a new tradition – family finance nights. He writes, “The idea is for families to get together on a regular basis to talk about how money is earned, saved, and spent. The financial topic du jour is up to you, but the goal is always the same: to give your children the invaluable gift of a financial education.” For tips on establishing a regular family finance night, go to www.smartaboutmoney.org and download the article “Money Night with Kids Instills Smart Financial Habits.”
Use tools. Many great resources are available to help make financial education fun and interesting for children. One example is the Moonjar, “a tool for children and families to incorporate strong financial values and practices into their daily lives,” according to its creator, Eulalie M. Scandiuzzi. The Moonjar kit (www.moonjar.com) consists of three colorful moneyboxes (one each for spending, saving, or sharing), a special Moonjar elastic band to hold the assembled boxes together, a passbook for deposits and withdrawals, and a family guidebook.
Also, Three Cups by author Mark St. Germain, is a delightful children’s book that combines a charming story with beautiful illustrations to teach invaluable lessons about money. A “Parent’s Guide” is included in the book and offers several tips about how to be an effective money mentor for children.
Even if your children are older, many are seeking guidance and advice. According to a recent New York Times article, student loan debt outpaced credit card debt for the first time in 2010 and is likely to top $1 trillion in 2011. More students are going to college, and a growing share is borrowing money to do so.
It pays to start teaching your children early about money, but recognize it is never too late. Our children need money mentors.
The Financial Consultants of Upton, Draughon & Bollinger are registered representatives with, and Securities offered through LPL Financial, Member FINRA/SIPC 207 Ansley Blvd., Suite A, Alexandria, LA 71303, (318) 442-4944.