Teaching kids about money is one of the most important things you’ll ever do as a parent. Providing them with financial literacy from a young age will equip them with the necessary tools to ensure long-term wealth for years to come.
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GOBankingRates spoke with Julie Meissner, founder and CEO of Treehouse Wealth Advisors, to discuss the three major financial lessons each parent should teach their children.
“Talking about money can be difficult for parents, especially if they feel like money is not really an issue in the household,” said Meissner. “And in today’s digital age, there is often a disconnect between cold hard cash and teaching our children that having cash apps, like Venmo and Zelle or Apple Pay, does not mean there are no limits.”
As high school turns to college, she said financial literacy becomes an important life skill — and one that parents can help their high school students learn without it feeling like another thing to master.
“Saving money for a rainy day is one thing, but financial literacy encompasses learning about more than saving,” Meissner added. “Things like credit, taxes, banking and investments are all important parts of financial wellness. … It’s up to us as parents to provide the guidance and support necessary so that our high school students can become financially responsible adults.”
Here are three things to teach your children about money — and tips to avoid making it a chore.
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Money Isn’t Taboo
“Money should not be a taboo topic in your household,” said Meissner.
By talking about money regularly, she said you can help your children become more comfortable with the subject.
“Financial literacy starts with the basics, such as learning how to budget, save and spend responsibly. For example, a teenager’s want for a new prom dress can open the door to a conversation about the cost per wear or alternatives like Rent the Runway,” she explained. “Decisions about a teenager’s car choice can include discussions on the cost of long-term maintenance, replacement parts or premium versus regular fuel.”
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Responsibility for Their Own Finances
According to Meissner, decision-making is one of the best ways to teach financial responsibility. “Running through options with them helps, but putting them in charge of their spending is even better.”
She said this could mean giving them a set amount of money to spend each month, having them budget their new bedroom décor or involving them in the family’s philanthropic activities.
“By getting them involved and in charge of certain aspects of their financial lives, you can help them learn how to build their money muscles,” she explained.
For teenagers, she said getting a part-time job is a great way for them to start earning their own money. “This can be a valuable learning experience, as they’ll need to budget and manage their finances. It’s also a good way for them to start building up their savings, learning about taxes and gaining respect for earnings.”
There’s Always More To Learn
Meissner noted that there are many great books, websites and articles that can help high school students learn about money. “By providing these resources, you can make sure that your teenager is getting the information they need to make responsible financial decisions.”
Some great resources Meissner recommended include:
“Remember that it’s important to encourage financial responsibility in your children,” she said. This could mean setting up a savings account for them or matching their contributions. “Set it and forget it will get lost in the day-to-day. So, set up a time and cadence to track their financial progress and celebrate milestones.
“By encouraging financial responsibility, you can help your children develop healthy financial habits that will last a lifetime.”
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This article originally appeared on GOBankingRates.com: I’m a Financial Advisor: These Are the 3 Financial Lessons Parents Should Teach Their Kids
