As a result of being a guest expert on Experian's #CreditChat panel once again, I thought this discussions's topic was one you all would relate to. Each panelist was asked to offer our thoughts on "Why it is important to talk to your children about money". Here are my responses to the questions posed to us in an easy to read format.
You may be waiting until your child is in their teen years to begin teaching them about finances. But, there is no need to wait! It's so important to teach your children as it gives them a good foundation when it comes to money. You should begin as soon as they are able to remember and regurgitate things like songs and conversations. You can successfully do this through money games, books, having them make cash payments at the store, and counting the change to ensure it’s correct. Here is a great coloring book for younger kids. For teenagers, you can use Vol 1 of the It'$ My Money journal book.
You may be asking what concepts should be discussed with your child at a young age. In my opinion, the fundamentals like savings, budgeting, needs, wants, goals, and investing are important to teach. The best way to do this is by showing vs telling! Depending on their age, bring them to the bank to make deposits and use technology to show them the transactions. Concepts like credit can be taught at a later age, preferably their high school years.
A large part of teaching finances to your child is to help them prevent mistakes. But even if they do occur, it should always be used as a learning opportunity. Never make your child feel bad about it, instead find which lessons they can learn from the mistake. Remember to be great examples to your children, manage your funds well and share as appropriate with your kids.Her are downloadable resources that can help you.
Also help your children to understand needs vs wants and make money an inviting topic. As a reminder some great resources are:
There are also resources for parents that can help you manage money so that the conversations and interactions with your children about money are a bit smoother.
A couple other resources that are available are the:
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I had a wonderful opportunity to again be a featured finance expert on Experian’s #CreditChat last week. I thought the questions asked of the panelists were awesome as were my answers so I wanted to share them in an easy to read format here.
Financial literacy month is an opportunity for us to truly understand the importance of healthy monetary habits. Many often ask why financial education is even important. This is because it is a major part of life therefore everyone needs to be educated in it. There are so many financial topics that individuals and families should be knowledgeable about such as budgeting, savings, credit, reducing spending, earning more, net worth, assets and liabilities to start. It is much easier to maintain and sustain if you start with a great foundation. Therefore, it is critical that you are properly educated in it!
Part of having a great foundation is starting at a young age. You should teach your kids proper finances as soon as they can talk. The key is repetition. Kids learn the words to wings because they hear it played often. So be sure to integrate finance concepts into what they see and hear. For ways to integrate financial education into their daily activity, click here to access a free coloring book. However, the learning does not stop there. As an adult there is still so much educating to be done.This can happen by way of a financial expert, CPA or coach. Some are an investment and some are completely free of charge. Like with sports, players have coaches. Even the best players. The coach gives them the play and the support team around them help get the win, discipline and much more. Think of finances the same, you can go alone or have someone in your “finance” team that is an expert to help you reach your specific goal.
It’s important that financial education stop being something that people approach in adulthood. It should be taught everywhere, in schools, colleges, and at home. It is so critical that we teach topics like budgeting, what I feel is the most imperative financial literacy subject. The reason being, it is a must to know exactly how much you have coming in and how much you plan to spend. Budgeting allows you to be intimate with your money and that intimacy will make you want to be the best steward of it. There are various resources available to teach someone about this subject and other finances such as personal finance experts, books, blogs, podcasts, YouTube and so much more. You want to ensure you are getting sound information or advice so be sure to do your research of the source. Here is a great blog to learn all things finance! Click here for access to additional resources.
There are so many benefits to being financially educated! When you are educated on how your credit score is derived and the components that make up your score you can use it properly which will have a direct positive impact. Examples include paying on time, keeping the balance at zero or under 25%. The great Maya Angelou said, “when you know better, you do better”. If you are never educated on (1.) What is a good credit score, (2.) How to access your reports, (3.) How your activity is rated, then you can’t use it properly. Knowledge is more power. The more financial astute you are, the better you are towards reaching your financial goals. I also believe accountability and execution plays a role. Hence why a coach can be helpful.
Some of you reading this may be very passionate about financial literacy and interested in sharing the wealth with others. You can promote financial literacy in your community by hosting events, even virtually, partnering with local groups (YWCA, Boys and Girls Clubs, Churches) to add financial topics to their agenda and articulate the importance of sound financial information and how that can be weaved into any initiative!
Let me know your thoughts on the topic and or my perspectives.
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