As parents, it’s our job to worry about our children – whether they’re two or twenty-two. We want to give them the world, while also protecting them from some of its harsher realities. We never want them to struggle, yet we know too much ease and comfort might not instill in them a strong enough work ethic. And all the while, society at large seems to applaud and reward bad behavior, while treating kindness and compassion as signs of weakness.
Let’s face it…raising charitable, ethical and fiscally responsible children in this day and age is no easy feat.
We all want to help our kids engage and connect with the world and others, to challenge their assumptions and beliefs, and to be both generous and prudent. Yet while there’s no shortage of advice when it comes to teaching small children about money and financial values, there’s very little guidance on how to impart strong financial principles to teens and young adults.
Focus on values more than money
Unfortunately, only five states (Alabama, Missouri, Tennessee, Utah and Virginia) mandate a personal finance education requirement for graduating high school students. So it’s up to you as parents to initiate those financial conversations. And a good place to start is by talking about money as a means to an end, focusing on its underlying purpose and value.
Take time to sit down and talk to your kids about your family values and the role that money plays in furthering those values. A few of these important conversations may include:
- Discussing the charitable causes you support with your time and your money and why they’re important to you;
- Talking about the commitment you have towards preparing for the future and the retirement savings preparations you’re making;
- Describing the value you place on higher education and the savings efforts you’ve undertaken; and
- Explaining the importance of protecting your family’s future from the unexpected, as well as the steps you’ve taken to insure the things that matter.
Urge your teens (regardless of how many extra-curricular activities they have) to find part-time work while in school. There’s no more important lesson they can learn than the value of money earned compared to money given.
Help your older children better understand their true costs by making sure they see and contribute (at least somewhat) to their bills. When parents pay their kid’s rent, credit card bills, car payments and/or insurance, rather than helping them it often just encourages them to live beyond their means. And most importantly, it prevents them from learning the vital budgeting skills they’ll need when the training wheels come off and they’re truly on their own.
Finally, latch on to any and every opportunity to help your kids engage with the outside world through “experiential learning.” Just one family vacation to a destination where your time and efforts can help provide for people in genuine need, can leave an indelible impression that will guide your children for a lifetime.
Reach out to your financial advisor if you need help with guiding the conversations about financial values with your children, or explore our additional resources.