By Bill Taber
Teaching your children how to manage their money is one of the most important life lessons you can bestow. Financial literacy provides the essential skills and knowledge your children need to make smart decisions with their money—and set them up for financial success as adults.
If you’re not sure where to start, don’t worry! Our team at TABER Asset Management has put together this guide to help you get started. Your kids will learn about money from someone, and you as their parent have the opportunity to teach them the right lessons to help them thrive as adults. Financial literacy is a skill that stays with them for life, so consider the following tips to support them toward a successful future.
1. Examine Your Own Beliefs/Scripts About Money
Money beliefs are formed when we are children, often through observing how our parents deal with money. Examples of scripts that can be accepted by our subconscious minds from a young age may include money avoidance, money worship, money status, and money vigilance. It is important to examine your own beliefs about money to avoid potentially hindering your own future ability to create and build your wealth, as well as your children’s. Here is a link to our podcast, "The 4 Money Beliefs That May Rule Your Life," which describes in greater detail these financially unproductive scripts to avoid/change.
2. Be an Example
If you want your kids to grasp the importance of handling money wisely, let them watch you make financial decisions and model what you want them to learn.
The number-one money habit children learn from their parents is spending habits—good or bad. If you spend money recklessly, your kids will see that. If you rely on credit cards to cover expenses or argue with your spouse about finances, they’ll accept that behavior as the norm. Your actions set a precedent, so be intentional about how you model money management to your kids and let their watchful eyes be a motivator to change any negative financial habits.
3. Start the Conversation
Since many areas of personal finance aren’t visible, sometimes a silent model isn’t enough. That’s why it’s vital to start the conversation now. Talking to your kids about money regularly leads to kids who are more financially literate. It doesn’t have to be a long drawn-out discussion. Just let them in on your thinking and decision-making as you go about your day-to-day life. At the grocery store, explain why you buy the off-brand cereal; at the bank, explain why the bank keeps your money and why you only take what you need from the ATM. These real-world scenarios help cement the whys and hows of money in your child’s mind.
4. Give Them Opportunities
For financial understanding to truly sink in, kids need to experience their own successes and failures. On a practical level, give your 5-year-old money to buy something at the store so they learn the value of different items and realize that an exchange of money needs to take place to obtain something like a toy. Try letting your 10-year-old figure out the cost of a new video game, plus tax, and help them save up allowance money to pay for it. Let your teenager buy their back-to-school clothes with a set amount of money.
Seeking out financial literacy classes in your area or online is another great way to introduce the topic of money management to your children. As they get older, you may even choose to guide them in investing some of their hard-earned money, letting them make some of the decisions. It may seem a little scary at first, but we all learn best by doing, so allowing your kids to make mistakes can teach them valuable life-long lessons.
We’re Ready to Assist, No Matter the Challenge
As a parent, it is natural to want the best for your children. You may be asking yourself if you’re doing enough to support your kids’ financial stability and success. Fortunately, there are a variety of resources available to help parents teach their kids about money.
At TABER Asset Management, we are passionate about helping families like yours pursue success through their financial plan. We understand that providing a bright future for your children is one of your top priorities, and we would love to help you realize this goal. We offer comprehensive financial guidance and advice tailored to your unique needs and circumstances, so you can feel confident about the decisions you make for your family.
If you’re looking for a trusted partner to help you set your children up for success and save for your family’s future, please don’t hesitate to reach out. We’d be happy to arrange a free introductory meeting to discuss how we can help. Get started today by scheduling a 15-minute intro phone call online or reaching out to us at 515-557-1860 or emailing invest@taberasset.com.
About Bill
Bill Taber is President and Founder of TABER Asset Management, an independent, fiduciary wealth management firm that strives to do one thing well: manage their clients’ money by creating wealth, building wealth, growing income, and preserving capital so they can experience financial freedom. With more than four decades of experience, Bill is dedicated to building relationships with his clients and their families and walking alongside them as they navigate financial decisions. His favorite days are the ones when he gets to witness the joy and relief on his clients’ faces when they realize they can pursue their dreams and live their ideal lifestyles. Bill is known for going the extra mile, getting things done with integrity, and working with a stewardship mentality.
Bill graduated from the University of Iowa with a bachelor’s degree in business administration and fell in love with the profession when he got to help one of his first clients—his father—turn his lifetime of hard work into a dream retirement. He got his start in the industry as a corporate services representative for Bankers Trust Company and spent decades working as Assistant Vice President of E.F. Hutton & Co. and First Vice President of Principal Financial Securities. He is also a graduate of the E-Myth Worldwide Mastery Business Development Program and is Series 65 registered.
In his spare time, Bill enjoys giving back to his community and served 11 years as a member of the Board of Trustees of Broadlawns Medical Center and 14 years as a Community Representative to their Board Finance Committee. He is also one of the founding members of the Greater Des Moines Connections Mentoring Program. When he’s not working, you can often find Bill spending time with his family and participating in one of his many hobbies, which include traveling to national parks, presidential libraries, and foreign countries; gardening; reading non-fiction; and practicing yoga, Pilates, and meditation. He also loves the simple joys of listening to music, going for walks or bike rides, and watching James Bond 007 films and any movie starring his favorite actress, Meryl Streep. To learn more about Bill, connect with him on LinkedIn.