When it comes to talking with our kids about money, many of us clam up and try to change the subject quickly. The reality is that if you don’t talk to them about it, no one will and they will have to figure it out on their own. So to help you out, here are 3 ideas to get the conversation started.
Talk to Them About Your Experiences
Many parents avoid talking to their kids about money and investing because they either don’t know that much about it or they feel like failures in the topic themselves. While this may be true for many of you, it’s important to pass down what you’ve learned, whether it’s good or bad. In fact, multiple studies show that kids want to talk to their parents about money, investing and how to budget. Unfortunately, many parents avoid the topic altogether. Even if you don’t know that much, you can talk to them about your experiences with debt, student loans, purchase decisions and more. You’ll be surprised how interested they are to listen to you and hear your experiences.
Invest Alongside Them
There are many ways to invest with your children but one of the best ways is to open a 529 Savings Plan, which allows parents to save and grow money for their children’s college education. The best part is that there are also tax advantages for these accounts. As the guardian and manager of the account, parents will need to fund the account and manage the transactions. While doing this, it’s a great idea to get your child involved and explain the benefits of this account, what the goal is and help them learn to develop a plan and strategy to achieve their goal. It’s also a great idea to let them choose some of the investments so they can learn from their successes and mistakes while watching their account grow in value.
Teach Them Through a Game
One of the easiest ways to teach children about money, investing and how to budget is to play a related game with them. Most people will think of Monopoly when the topic of money and a game comes up but did you know there is a far better game than this that will help them learn all about budgeting and investing? It’s call Cash Flow 101 and was developed by real estate tycoon, Robert Kyosaki. The founder of the Rich Dad, Poor Dad Empire knows a thing or two about teaching people how to make money. In fact, in this game you have a real full time job and typical life decisions are simulated. You choose investments to make while tracking your income and expenses and try to get out of the rat race. Not only will this game teach your kids a lot about money but you’ll also learn a lot about investing and generating passive income in the process. This is definitely a fun way to learn about budgeting and investing while getting to spend quality time with the family.
I challenge you to try one or two suggestions from this post and see which ones work for your kids. Many kids want to learn about investing, budgeting and money but have no one to teach them about it, including the public or private school that they attend. Without education in this area, they are doomed to repeat the same mistakes as previous generations by running up debt, living paycheck to paycheck and getting taken advantage of by predatory lenders. Take some time to help your kids out and you’ll see how grateful they are that you cared.