Discussing Money With Family Part 3: Financial Conversations to Have With Your KidsInsights
Money is a powerful force in our lives. As young people enter adulthood, good financial skills can be a big mystery. If we get a good start when we are younger, it is an easier path to better things. But a bad start can create a vicious cycle of problems that are difficult to overcome. What should you be teaching your kids about money? We share some of our lessons and observations on this week's show.
Watch Now; Financial Conversations to Have With Your Kids
- 0:00 - Intro/Disclaimer/Welcome
- 0:53 - Lessons Learned - Save for a "rainy day"
- 2:15 - The differences between needs and wants
- 4:11 - The value of work and helping others.
- 4:56 - The mistakes we see young people make.
- 5:59 - The lessons we have tried to teach our own kids.
- 9:10 - Starting the right way with money
- 11:38 - Tips to help start the money conversation with your kids.
- 14:50 - Outro
Discussing Money With Family
Talking to family and loved ones about money is challenging. But having those discussions can help avoid significant problems in the future. Check out our three-part series: Discussing Money With Family. Subscribe to our YouTube channel so you don't miss them.
Part 1: Discussing Money with Aging Parents
Lessons Learned: Saving, Wants vs. Needs, The Value of Work
Building good financial habits begins with some basic building blocks. The first is to make saving a priority. The second is being able to understand the differences between wants and needs. The third: for most of us money is earned from our own efforts. We learn them in different ways and at different times in our lives. But when we do, it creates a solid foundation on which to build.
The Mistakes We See Young Adults make
The biggest mistake we see is the misuse of credit cards. Credit cards make paying for things easy. It makes it so easy, that we can find ourselves in a position where we have spent more than we have. This leads to problems that can take years to overcome.
This often stems from not having a basic understanding of your cash flow. How much is coming in each month, and what are you spending? When you fail to understand this dynamic or do not have things organized you can get into trouble quickly.
Approaching Your Kids About Money
Those of us who have raised teenagers understand the challenges of those conversations. Young people are stretching their legs into adulthood, and they may not believe their parents know anything. But it can still be a valuable conversation. Talk to your kids about..
- How debt adds to the cost of your purchase.
- The importance of understanding your own cash flow and spending less than what you earn.
- The importance of improving your ability to earn.
- The power of saving and compounding interest.
The better they understand the basics the better start they will have. And if you need someone who is an independent, unbiased voice, ask your financial advisor to meet with them and provide some basic education.
Appearing in this video
While he doesn't have kids, yet, he still remembers quite well the lessons he learned from his parents. Andy is a financial advisor in Parkersburg.
Todd Kimpel, CLU®, ChFC®
Todd raised 3 kids and has tried to share his wisdom to help them get off to a good start with money. Todd is a financial advisor in Wheeling.
Neal Watson, CFP®
Neal raised 2 kids and helped influence 2 stepdaughters with good financial lessons. Neal is a financial advisor in Marietta.