As I write this, I am sitting at a table with my two teenage sons and their respective friends while they play Monopoly. The silliness and deal-making is in full swing. Such is our life on a rainy day at Moody Beach, Maine.
Monopoly is an iconic game of real estate investing, money and deal-making. It was one of my favorite games as kid, mostly when I won but even sometimes when I lost. It was one of the first opportunities to learn about money and investing. Sometimes my friends would spend too much early in the game and then go bankrupt paying the huge rent to stay at a hotel on Boardwalk. It was a great game to learn about money in a safe environment.
We are often asked how to teach kids about money and how they can become financially responsible as adults. It is a complicated concept but I think the best answer is to give your kids opportunities to learn about money—and make money mistakes—while you have the opportunity to guide them.
Probably the thing you might not expect is that kids learn about money decisions from an early age. How is this possible? They are learning from you, their parents or grandparents, every day. They are watching how you make money decisions, for better or worse. If you are always saving for a rainy day or always tempted to spend on things you want today, your kids are watching. They see how you make decisions and that is often the model that they will use once they grow up.
What can you to do?
Try discussing your financial decisions when they are present or if they are a part of the transaction, such as planning for a family vacation. Don’t give them a lecture; just show them how you control costs by prepaying for certain expenses before departure rather than making a buying decision on the spot. By making them part of the conversation, you have an opportunity to explain how you arrive at your financial decisions.
Looking for other ideas on how to teach your kids about money? Give us a call. We’re here to help.
Lyman H. Jackson
Financial Planning Solutions, LLC (FPS) is a Registered Investment Advisor. FPS provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, or legal advice. FPS only renders personalized advice to each client after entering into an advisory relationship. Information herein includes opinions and forward-looking statements that may not come to pass. Information is derived from sources believed to be reliable. Information is at a point in time and subject to change without notice. Such information may not be independently verified by FPS. Please see important disclosures link at the bottom of this page.