The ABCs of Behavioral Biases (O-R)
Written by Andrew Hunt
Written by Andrew Hunt
Teaching our children the importance of financial responsibility is one of the most important life lessons that will follow them into adulthood. It’s never too early to show kids the habit of saving money and spending it wisely. It’s important to show children that money should not control you and that being financially responsible can be very empowering.
As parents, we typically have a very disciplined approach to raising our children. As kids get older, they naturally become less receptive to this guidance, which can make teaching life lessons challenging. Other relationships children may have, like with their grandparents, can sometimes produce better opportunities for teaching important lessons like financial management. And likewise, grandparents tend to be less disciplined with their grandchildren than they were when raising their children.
If you’re a grandparent that has a good relationship with your grandchild(ren), you have a good opportunity to instill this life lesson onto them. So what can you teach them about fiscal responsibility?
Here are three things to teach grandchildren about money.
Encouraging children to save money at an early age is one of the best ways to teach them about financial management. Rather than just telling them they should save money, share with them a personal story about how you saved money when you were younger. Did you work a summer job during your school years that helped you save up for a new bike or car? Did you stash away birthday money for something special? Your grandkids will love hearing these personal stories and it will give them a more memorable lesson of saving money.
This may be especially top of mind right now as we currently live through the coronavirus pandemic. Cutting costs and finding thriftier ways of living may remind you of another time in your life when your family had to do the same. Talk to your grandchildren about times when it was important to control expenses and how that affected you in your life. Again, sharing personal stories will connect them more strongly with the lesson being taught.
It should also be taught that having wealth and being financially responsible means it is an opportunity to help those less fortunate. Helping others by alleviating their needs is an important component of being socially responsible. Share with your grandchildren about ways you have helped others and organizations you are a part of that focus on helping others. It’s a lesson in empathy to teach children that being financially responsible can put them in a position to help others.
Being a family steward doesn’t need to rest solely on a working parent. Grandparents can play an important role in teaching children empowerment and how financial responsibility plays into that. By practicing good money habits, we put ourselves in charge, which is a powerful thing.
We are strong advocates of family stewards and we can help set goals around planning for a family’s future and leaving a legacy for your family. Connect with us today so we can help you on your mission to focus on the well-being of your family.