Financial Lessons for Our Children
by Alicia Wanek | Staff Writer
My son’s teacher welcomed her first child into the world this week. When my twins were born, I thought I had a long 18 years ahead to teach them everything necessary for their successful adult lives. I was mistaken! Now that they’re in high school, I feel the time is slipping away to ensure they’re ready to navigate the real world. Will they be able to live independently and care for themselves? How do we instill in them an appreciation for the value of money? During this season of plenty, we also have the opportunity to impart the gift of financial wisdom to our children.
Start Early with Saving and Budgeting
Chuck Cowell, Dallas Market Chairman for Guaranty Bank & Trust, emphasizes the importance of starting young. “The earlier kids are exposed to saving money and learning about fiscal responsibility, the better.” He advises that even young children should have their own money. As they mature, assist them in opening a checking account with a debit card, ideally at a bank that will support them from the beginning. This way, they can experience how a community bank with a personal touch can forge relationships with even its youngest customers.
Building Good Credit Histories at 18
Chuck also mentions that once children turn 18, it’s crucial to help them establish a solid credit history. Initially, car insurance rates are determined by credit history. Then, as they begin job hunting, potential employers will assess their credit scores. “Your credit score reflects how you manage your finances. Poor credit can severely hamper your opportunities,” says Chuck.
Set an Example with Money Management
Children often learn by observing their parents’ financial habits. Bryan Camper, a certified financial planner and wealth manager at Camper Rogers, believes that “Parents sometimes don’t realize how their behavior influences their children. If parents overspend, their kids are likely to do the same. Conversely, if they live frugally, their children will follow suit. Their ‘financial DNA’ is formed early on.”
Some lessons need direct teaching. It’s important to show children how to budget, encourage them to donate some of their money to charity, and explain how interest rates impact costs—not lessons typically taught in schools. Additionally, it’s vital to help children distinguish between wants and needs; for instance, they need clothing, but expensive brand names are not a necessity. Bryan points out that today’s youth often have “a distorted sense of necessity.” As parents, you may need to make tough decisions to help them grasp this concept.
Discuss Financial Principles Openly
While you might be uncomfortable sharing your personal finances with your children, you can discuss fundamental financial principles. Make them aware of how you arrive at financial decisions: “We had to replace the air conditioning unit this spring, so we’ll need to adjust our vacation plans this summer,” or “Your mom earned a bonus at work; how do you think we should use this money?”
Teach the Value of Earning Money
In current times, kids may view their parents as personal ATMs. Many children today struggle with delayed gratification and tend to make impulsive purchases. “It’s important for them to understand the meaning of earning their own money. Teaching lessons about fiscal responsibility is much easier when income is earned rather than merely given,” Bryan advises.
This principle resonated in my household. My twin daughters received iPads at age 12 and felt it was unfair for their younger brother to have one any sooner. He took it upon himself to clean up after neighbors’ pets, asked grandparents for chores, and saved his birthday money to buy his own device. The pride on his face when he presented his own crumpled cash was unforgettable. That day, I was sure he learned a significant lesson—and so did I.
For more information, contact Bryan Camper at www.camperrogers.com or Chuck Cowell at ccowell@gnty.com.
