Talking Money with Your Kids

“Money makes the world go around

The world go around

The world go around

Money makes the world go around

It makes the world go 'round.”

It’s a fact of life that kids will not escape from, so when do you sit them down and explain what makes the world go around?  If their quality of life will ultimately depend on their navigation of a 401 (k), when do you start to teach them tips and tricks?

Millennial financial advisor Stefanie O’Connell says before you even get to talking about dollar and cents, there are three basic principles that can be taught that will have profound applications once money is introduced.  “Sharping, spending and saving.  Those are concepts that can be introduced at any time and are naturally part of our day-to-day life, and we can talk through those decisions with our children.”

A new survey by Capital Group finds that as with so much in life mom does the talking and teaching, until the topics turn to investments or buying a car when dad steps in. Moms in the survey say they have three broad areas they want to introduce their children to, beginning with savings and basic money responsibilities.  Investing and budgeting are second, followed by specific life events like buying a car or home and managing credit.

“Start teaching those principles and having conversations about them when they’re really young and when it comes to applying it to money they already have a good vocabulary and understanding of how to work those principles,” suggest O’Connell.

Discussions of finance begin earlier for Gen X and Millennial parents than the conversations they had with their Boomer parents, 39% of millennial moms saying the dialogue should begin before age 12, compared with 22% of boomers.

33% of parents say they wish they had begun the conversation earlier.

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