Let me address the elephant in the room. I am advocating that we teach our kids about money, but is based on a few key assumptions. In the next two posts, I will address two such assumptions. The first being that we are financially literate ourselves, and secondly, we are comfortable talking about money.
I’m Not Financially Literate
With regards to our financial literacy, without a doubt, we can always learn more. Investing, debt management strategies, retirement planning, and the list goes on. There are endless methods and tactics for how, we as adults, should be dealing with money. You have probably heard some of them:
- “Save automatically”
- “Pay yourself first”
- “The 50/30/20 rule”
The list is endless. I’ve read something recently that says, in effect, “We can not give, what we do not possess.”
So how then, can we be expected to teach what we do not feel we know?
Yes, You Are Financially Literate!
To that I say, don’t sell yourself short. We all have had experience with money. Our journeys are all different and our level of knowledge varies vastly. However, when you compare that to your child’s knowledge base in this realm, you are a wise financial sage. The important takeaway is that if we are not talking about money with our kids, they will be forced to will be interpret what they can from the media and other social influences in their lives. It is best to provide a basic shared foundation of finance, to help our kids start off their relationship with money in a positive way.
Simply earning an income, paying bills, and spending your money has given you a solid grasp of the basics. You likely know how to prioritize your spending to cover your needs and you understand the difference between a need and a want. One way or another you have learned the ramifications of spending more on wants versus needs. For the outset, your child does not know these things. Here is where you start. Teach your child that money is a limited resources, and our wants our unlimited. Discuss the need to make decisions about how this limited resources will be used. Talk through how you make your decisions and what you value. The more complicated money management strategies can come later. If you want, you can learn those strategies with your child when the time is right, but don’t let a lack of complete knowledge on the subject stop you from even covering the basics. We owe this to our children.