With the holidays right around the corner, many of us are looking forward to celebrating our favorite family traditions. But have you ever thought about having family ‘financial’ traditions? Most of our initial exposure to money management comes from our family upbringing. For parents who model good money management, they are passing on family traditions that go well-beyond Christmas morning pancakes.
Don’t Just Give Your Kid an iPhone or Car
The greatest motivator there is for a teenager is freedom and their path to that freedom is first an iphone, and eventually a car. When we just buy our kids an iphone or car, rather than supporting them to learn to earn money to pay for these things, we overlook one of the greatest opportunities we have for helping our kids to become self-sufficient.
If you have an extra phone or car available for your child, consider requiring them to pay for the monthly data bill, or for the car’s gas and insurance. By requiring our kids to contribute, we prepare them for a life of independence, which is a far better gift than any material item.
Play the Stock Market With Your Kids
Introducing children to the stock market is not a far-fetched idea. There is plenty of information available that can be understood by kids. First off, children are very aware of products — toys and games like the CashFlow Board Game, for example. They can be introduced to the fact that the companies that make these toys are owned by people like their parents, who hold shares of stock. From there, they can be shown the daily stock prices and how they change. As they grow older, your children can begin making small stock purchases and become comfortable with investing.
Family Vacation Saving
Family vacations are usually looked back on fondly and may even be considered family traditions. Saving during the year, by children as well as parents, for an annual vacation can also be part of that tradition and help teach good money management techniques.
Whether it be from jobs kids have like grass cutting or babysitting, or just from allowance savings, it will serve children well later in life to have learned the value of setting money aside for a deferred pleasure.
Teaching kids to be charitable helps them become aware of the needs of others. Introducing kids to putting money in the pot at church, or donating clothes to the local homeless shelter, gets them in the habit of giving from an early age.
If you give to charity regularly, you may want to consider setting up a private foundation that can be used to consolidate your giving plus be used to educate your children about investing (all of the assets of the charitable foundation need to be invested) and giving.
Involve your children in your estate planning as soon as they are old enough to understand. They will feel secure knowing you’ve planned well for what would happen to them, if and when something happens to you. Have them meet your lawyer, tell them about who would be their guardian, or how they will receive their inheritance and when. And, begin to talk now about how you can increase the overall family wealth you have and how you want to be cared for by them at the end of your life.
Supporting your children to think like entrepreneurs can be one of the greatest gifts you give them. As the world shifts, we are moving into a new economy in which reliance on traditional jobs no longer provide the security they once did. Technology will replace many of the jobs people relied on in the past and the only real security going forward is resourcefulness, creativity and community, all of which is learned via the path of entrepreneurship.
One simple way to encourage entrepreneurship for small children can be as simple as setting up a lemonade stand. For older children, encourage them to babysit or tutor as a way to make money.
For more financial and estate planning guidance, contact your Newport Beach Trust and Estate Planning Law Firm. We help families secure their future through proper estate planning. Call our Client Services Director, Bonnie Johnson, at (949) 718-0420, to receive a free copy of Laura Meier’s #1 best-seller Good Parents Worry, Great Parents Plan, when you schedule a planning session with a Meier Law Firm attorney.