Schools In! Although it feels like summer just started, it’s already after Labor Day and for most that means that classes are back in session. Depending on the school your children are attending, their grade level, and what they’re studying they may or may not be getting a basic financial education. We’ve all heard the saying that we’re taught to find the area of a triangle, but we’re not taught how to do our taxes.
So let’s bring the classroom to our homes. Teaching children about finances can start at a very young age and expand into their young adult years. The conversations should start at home, how much do things cost, why does the cost rise every year, do paychecks rise along with the costs of goods and services?
We can also talk about things like housing, financing an automobile, or the upkeep of the family cabin. Research says that up to 69% of homeowners in the US feel “house poor.”* In other words, nearly 7/10 people say they spent way too much money on their homes and now feel like they don’t have enough cash flow to spend elsewhere, invest, or save for an emergency. This is a great opportunity to discuss options with older kids like saving for a down payment on a home, how much of their monthly paycheck should go to their mortgage and what other homeownership expenses they might incur. Another big purchase for most young adults is their first vehicle. Should they buy new or used? How does financing work? What are interest rates anyway? There are auto loan payments nowadays that span 7+ years, sure it makes the monthly payment seem more affordable, but locking in a long-term loan like this is typically of a sign of spending beyond your means.
Money and personal finance should be a family affair. If you’re not comfortable, you don’t need to get into the nitty gritty details of how much mom and dad make and exactly where every single dollar goes, but you can research average salaries for various careers or the general cost of things, such as gas, groceries and even school supplies. By opening up the conversation about finances early on, children will feel comfortable to come to you for questions as they grow, get their first jobs in their teenage years or even take the first step in their adult careers once they graduate. Whether your children’s school teaches personal finance or not, a great way to expand the conversation and teach the things your family values start at home.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.