How to empower our kids with money fundamentals

One of my passions is financial literacy – for EVERYone!  How do we empower the next generation to live a more financially secure life?  By getting ourselves on track and modeling monetary priorities.  It’s not always easy…

… but it really IS necessary.  For many years, I have towed this road totally alone in my family and I truly hated, dreaded and panicked about that responsibility falling completely on my shoulders.  I had spent years upon years reading up about money and finding ways to make sure the biggest goals were tackled and all of the bills were paid even when we lost 2/3 of our income.  I have kept us afloat if only by sheer panic driving an overwhelm of learning whatever I could to make things happen.  My feelings about this did not outweigh my husband’s desire to NOT be involved in the money.  Until last week.

I have no idea what happened but a switch flipped in him and voila–he was suddenly open to REALLY learning about money.  Not just SAYING it to make me feel better.  He was in.

*insert a lot of stunned, jaw-to-floor face followed by hesitant jubilation on my behalf*

The first thing I did was break out Dave Ramsey’s “Total Money Makeover” workbook.  He really needed the push to see exactly how much he avoided dealing with money.  But as we worked through the pages (yes, I worked with him to foster some REAL “money talk” between us), I realized we really did do a lot right.  Our finances are horrifying at the moment because of Husbeau being out of work since November; but we weren’t nearly as bad off as we could be–and I think *I* needed to see that.

I’m also seeing that I am off of my personal timeline for where I wanted my kids to be in terms of their financial education at this point.  Because that education doesn’t come by teaching–it comes by experience.  We spent so many years in limbo that we put the cash envelopes into the bank and the kids lost that hands-on-money education I had laid out and started for them.  What’s worse is that we’ve had less conversation about money and money management than I’d have liked to have had by this point.  Sure, they fully understand the idea of mortgages and rental properties and who pays whom and the problems when there is a break in the payment cycle.  They understand tax and sale prices and buying online vs. in a store and that whole instant gratification cost.  Their allowance is broken into categories that include long-term wealth-building, charity, fun money, large purchases and educational items.  These are great starts.

My oldest is 13 and at this point I really wanted him to have had enough experience blowing his money that I could give him a few of his own budget categories and I don’t feel like we’re there yet.

Where are you with this?  How are you teaching your children about money?  Are you modeling money decisions for them?  Are you careful about the language you use around money and the mindsets it can create (good or bad)?  Do your kids get an allowance and if so, is it tied to chores? (you can see how our family handles allowances in this blog post)  No child needs to get an allowance to learn about money.

How you think about, speak about and handle money is going to drive a lot of what your kids learn about money and how they feel about it.  If you’ve totally screwed it up, don’t panic.  Fix it.  If you really don’t know what you’re doing, learn WITH your kids.  Engage them in the process of making it better.  Put it in age-appropriate terms.  Decide to gain power over your money instead of money owning you… and pass that on to your children.

My goal is to teach my children how to be financially stable by ensuring they set up emergency funds and learn to engage with their money by way of active budgeting and tracking.  I want them to understand how credit works and is used with a healthy dose of caution as to when and where it may be useful (I know that’s a controversial topic).

For now, we parents are reconfiguring our financial lives and making lots of big decisions about what is worth how much and what are we willing to give up for which gains.  Decisions I’m annoyed to have to be making (because I feel like we should have better planned for this situation), but thankful not to be making alone.

Teach them well on this one, mamas… Start young.

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