The bags have been packed and by now most kids have been easing in to new schools for a week or two (at least in Michigan). Your child’s education is safely in the hands of devoted teachers. We all know a parent’s job is never done and there is always a long list of “to-dos” as well as “to-learns”. New studies show that financial lessons need to go to the top of those lists.
A recent study by British researchers at the University of Cambridge indicates that a person’s approach to money can be set as young as age 7. So, in addition to reading, writing, and arithmetic, make sure to provide money lessons to your kids in everyday life.
Teaching Delayed Gratification
These lessons aren’t just about adding and subtracting to and from your account. More important, it’s about decision-making and the ability to delay gratification – you know, saving now so you can make that big purchase later? Turns out that squirreling money in a kid’s piggy-bank for the bike or video game they want goes a long way to train them to tuck money away for retirement.
Financial Literacy for little ones
So, if you’re in a household that doesn’t like to talk about money, take some steps to introduce dollars and cents into conversations. Give kids practical experience through old-fashioned methods – piggy banks, allowances, or allowing for decisions when it comes to treats. Show limits for kids and recognize that these lessons are hard for adults as well as kids. It’s okay to let them slip up when young and make the consequences appropriate for their age and experience.
A parent’s job is never done and this is just one more thing on your list of responsibilities. As you work to give your kids a firm foundation in financial literacy, don’t hesitate to ask your financial planner for some tips and tricks, we’re always happy to weigh in.
Melissa Joy, CFP®is Partner and Director of Investments at Center for Financial Planning, Inc. In 2011 and 2012, Melissa was honored by Financial Advisor magazine in the inaugural Research All Star List. In addition to her frequent contributions to Money Centered blogs, she writes frequent investment updates at The Center and is regularly quoted in national media publications including The Chicago Tribune, Investment News, and Morningstar Advisor.
Financial Advisor magazine's inaugural Research All Star List is based on job function of the person evaluated, fund selections and evaluation process used, study of rejected fund examples, and evaluation of challenges faced in the job and actions taken to overcome those challenges. Evaluations are independently conducted by Financial Advisor Magazine.
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