Preparing your kids for financial success starts now.
Stacey Tisdale, a financial behaviour expert with 20 years of experience teaching people how to be comfortable with money, says: "So many of us grew up with parents that just paid the bills but didn't tell us how they were doing it. It's important to prepare kids for the financial side of life; they’ll be dealing with money for the rest of their lives."
Here are five ways Stacey says you can make sure your kids grow up to be better off than you are:
1. Talk about money at home
"Money can be such a taboo topic at home," Stacey says. "But the only way to get comfortable with money is to talk about money. Explain that money is not some big, bad thing to be scared of, but a tool that you use to create the life that you want. Discuss credit, saving, debt, having a budget and the way that money is used in the household."
2. Involve them in a few financial decisions
Your kids may not pay the electric bill or get involved in whether or not to paint the house next summer, but they can join in on certain day-to-day financial decisions.
"Your kids can definitely make out a grocery list," Stacey says. "While at the grocery store, let them get items off the list and see what it costs. If you decide to buy a movie online, let them pick it out and see how much it costs. You have to show kids that money factors into almost every decision in the household."
3. Start a savings account for them
"This year, when they get holiday money, open up a savings account and discuss it with them," Stacey says. "While at the bank, discuss what’s happening and talk about deposit withdrawals and account balances. If you can, open up an education savings account and keep them up to date on how it’s growing and what that will mean when it's time for university."
4. Get them in the habit of saving, as early as possible
"As a financial expert, I’m always telling people to get started saving as early as possible," Stacey says. "Well, this is how it starts. Make sure that your kids understand the importance of saving and why. Talk to your kids about having an education savings account instead of student loans, an emergency fund instead of credit card debt, and saving more for a down payment on a home instead of having high mortgage debt. Teach them the benefit of saving money now."
5. Set an example
"This is the most important thing you can do," Stacey says. "If your kids see you managing money well, they’ll want to as well. If kids grow up with anxiety around money and finances, they’ll likely experience anxiety around their own finances down the road. Show your kids how to handle money the right way through your own example," Stacey states.
This article was written by Jennifer Streaks from Business Insider and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.
