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Teaching Finance to our Kids

Spending, saving, investing and debt are essential concepts to begin educating children about money in the real world.

            This year many families are faced with unprecedented financial challenges and economic anxiety. Our early experiences with money set the template for how we approach work, spending, debt, and our ideas about wealth. The way a family chooses to respond to their unique challenges will impact children the most and endure for a lifetime. 

            The financial climate in your home has a lot to do with how money was dealt with as a child. Did your parents speak to you with fear and anxiety about lack of money, or was there a positive outlook leveraged as an opportunity for growth and development? Our circumstances provide a real-life framework for our children’s financial literacy, to include children in discussions about saving, earning, investing, and debt. 

            Do your children act like money grows on trees? If they see you effortlessly pulling out a credit card for every purchase or they play video games where they can buy accessories for avatars, it’s understandable why they hold onto that cliché. Keep it simple and use terms they can understand, and realize that, like investing, it’s a long-term process. 

            Play The Four Buckets game. Children divide their money into four buckets: 1-spending, 2-saving, 3-investing, and 4-charity. Discuss the concept of opportunity cost. In other words, if they choose to spend all their money, they would have none left for the other three buckets. Kids learn best with real-life stories and games applied to real-life to make the learning experience fun and interesting.

Lauren E. Robbins (CA Insurance Lic. #0K57671) is a Registered Representative and an Investment Adviser Representative with/and offers securities and advisory services through Commonwealth Financial Network®, member FINRA/SIPC, a registered investment adviser. Fixed Insurance products and services offered through the CES Insurance Agency. Hawekotte Financial Group is located at 2248 N. State College Blvd. Fullerton, CA 92831. (714) 879-4421.

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