Pass on the “Wealth”
What’s no big deal to you oftentimes fascinates kids. All of these experiences can help to guide or perhaps inspire the next generation.
Not so long ago, extended families tended to live near each other. If they didn’t live in the same home, Sunday dinners brought them together for the day. Now, Grandma and Grandpa might live in sunny Florida, while aunts, uncles and cousins might live on another coast. Still, your entire family and community can be part of raising a financially savvy and socially aware child. Grandparents are a great resource of family stories and can share what they learned from their experiences during the various financial booms and busts in the last few decades. Aunts and uncles can also play important roles by supporting and encouraging kids to follow their passions.
Whether your family has lived comfortably for generations, or finances are currently a source of some stress, money shouldn’t be a taboo subject, “You don’t want money to be the biggest secret in the family,” says Neale S. Godfrey, president of the Children’s Financial Network. You can start by talking about the good that wealth can bring, from happy experience to charitable donations. Whatever your family chooses to discuss, here are some ways to make raising a financially fit child a family affair:
Talk About The Neighbors
Gossiping about people you know isn’t nice. But financial success and failure is all around us these days — and can be teaching tools. Talk to your children about what they’re seeing happen to friends in the community. “For instance, when the neighbors across the street are foreclosing on a home, or the next-door neighbor is driving a new Ferrari, this may allow for discussions about values, money, and good financial decision-making,” says Scott Haltzman, author of The Secrets of Happy Families.
Let Gram and Gran Give a History Lesson
As they say, the past is prologue, and grandparents are built-in history teachers. The best part? Grandparents also happen to be excellent storytellers (it’s just part of the job!). Let your child’s grandparent talk to them about past recessions, how they had to cut back, how they’ve saved for retirement and are now living off of those investments. Specifically, they can talk about what a wonderful thing retirement is (including golf and grandkid sleepovers) and why they’re glad they planned for it.
Ask Relatives to Contribute to Your Kids’ College Fund
Encourage your family members to contribute to your child’s 529 college savings plan or other savings account instead of giving them another toy for the holidays and other celebrations. Some family members might not feel comfortable giving money for your child’s future. That’s ok. But other family members will embrace the idea of giving a gift certificate that goes directly into a 529 plan. It saves them time and a trip to Toys R Us to find the right toy (which might be played with for a month or two and then get tossed in the basement). If you make it easy for relatives by providing stamped envelopes to mail directly to the plan or a link to the plan’s web site that allows them to give a gift (such as Fidelity) and emphasize that the money will be used only for education or learning tools like a computer, then they’re more likely to get on board.
Get Kids Involved in Charitable Giving
Your children may get a check or American Express gift card from relatives for birthdays and holidays. But you can help them give financial gifts to their favorite charity this holiday season. Supplement their small donation, and you’ll be showing — not just telling — them that giving back is a family tradition, one that you’ll hope they’ll carry on for years to come.
To make the giving experience more memorable and meaningful, encourage them to choose a local charity that involves kids, so they can go and see how the gift they have made will impact other children just like them. Another way to introduce kids to charitable giving is volunteering at a local soup kitchen or donate needed clothing or food items at your church, synagogue, or schools.