Money Sense Starts At Home

Everything is presented in lists these days. 😎

I was pleasantly surprised that the first three items on a list of lessons for kids before they turn 18 were related to financial literacy.

The items?

• Read a pay stub without guessing

• Set up direct deposit and know FDIC basics

• Handle teen taxes

However, boys and girls should learn financial literacy skills long before they get their first real jobs. Children have to handle money throughout their lives, so it benefits them to master smart money management as soon as possible.

Often, these skills are not taught in school, so the responsibility falls on parents to pick up the slack. Parents who were never taught how to manage their money may not see the need to nurture this ability. And those who acknowledge the importance may face the question: how do I share financial wisdom I never gained?

No judgement if you find yourself in this position. Maya Angelou is often quoted as having said, “When you know better, you do better.” You owe it to yourself to learn and practice smart financial habits. Teach your kids at the same time. There is no shame in gaining this knowledge together.

To build financial literacy skills you must first understand how and where you spend money and then determine what adjustments are needed to achieve your financial goals. The best way to accomplish this task is to create and follow a budget. This working document helps you clearly understand how you spend your money and determine ways to reduce debt, save, and invest.

I discuss budgets and how to determine the right budget for you on my website.

Once you’ve done step one, it’s time to start your journey and encourage your children to join you. 

 I may have gotten a little sidetracked. Let me return to my original train of thought: teaching children how to manage their money.

Combining the nuances I discuss below with learning basic financial literacy skills will encourage responsible behavior, reduce stress, and improve your quality of life.

So, here is the list of financial intricacies I suggest you learn and share with children so they can also experience life with quality.  

Save money before you need it. Emergency savings allow you to take care of ‘life happens’ situations that can cause your budget to crash and burn. You know those unexpected expenses: home maintenance, car repairs, medical charges your insurance doesn’t cover. 😭

The ability to take care of most, if not all, of these expenses when they occur makes life so much easier.

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An unforeseen bill isn’t an issue unless you don’t have money to pay it. 

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Make your savings work for you. Once you’ve accumulated a comfortable amount for emergencies, future savings can go towards planning vacations, pursuing hobbies, and retirement preparation. This is also the time to save towards building your financial legacy to create generational wealth.

Borrow with intent. Understand the difference between good and bad debt. Debt should be a strategic move rather than a never-ending payment cycle. Your financial plan should include a reasonable amount of debt that you, not your creditors, control.  

I urge you to learn and share financial basics and critical thinking skills with your children. Doing so will be one of the smartest gifts you can give them.

I know. It’s a lot. But you can do it. 

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