Help Create Goals and Allow Mistakes
To help children value money, they need to be responsible for making financial decisions, without judgment. Many experts recommend setting specific goals for the child and using funds from an allowance, birthday, or holiday gift, etc. Goals should include saving a portion of an allowance or gift money, giving a piece to charity, and having the freedom to spend the remainder. Mistakes will occur (not enough money left to spend, not enough put in the saving “bucket” etc.) and as a part of the learning process that should be expected. Children need to practice appropriate financial decision-making and learn about the responsibility of making wise monetary choices. The goal is to instill positive money habits early, rather than trying to change bad habits when someone is in their 20s or 30s.
Let Children In on Family Financing Plans
As children get older, their financial responsibilities should grow: give them a budget to purchase school clothes, help plan a family vacation, or be in charge of adopting a family for the holidays and organizing gifts to be purchased. By allocating such responsibility to the child or teen, they will learn the importance of budgeting and how to properly use funds for a variety of different reasons. Regular age-appropriate discussions should occur regarding how much income the family has in addition to family savings and giving objectives. It is important for parents to set the stage for open discussions about money, and not allow their children’s habits to be influenced by media, friends, or other people whose financial values may differ from their own. By introducing strong money habits at an early age, parents can teach strategic lessons to children so that when they pass down an inheritance, their children can utilize the funds to secure their
own financial future. Lynn Mayabb, CFP, office director at BKD Wealth Advisors in Kansas City, MO, has more than 25 years of experience providing financial management and consulting services to high net-worth families and corporate clients. She assists clients in developing financial plans, managing portfolio strategies and ongoing wealth management. Read more:
http://www.foxbusiness.com/personal-finance/2013/03/01/inheritance-101-how-to- pass-on-financial-wisdom/#ixzz2Maa3obLp
The Ultimate Gift is a great family movie to be used as an example of financial wisdom and inheritance. The power of “Money” left behind
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