Over the past couple of weeks, we’ve focused quite a bit on talking to your parents about financial health and literacy. (ICYMI: Check out our two posts here and here.) But today, we want to flip the script and discuss the importance of talking to your kids about these topics—and why it’s always best to start ‘em young. These topics have long been taboo, and we just want to do our part in starting these imperative conversations… no matter how uncomfortable!
To get some first-hand insight on this particular topic, I sat down with fellow real estate investor Jean Haisch. She started holding financial literacy lessons with her young kids and has kept them up for over a decade. (Both kids are teenagers and one is off to college next year.) Through consistency, patience, and understanding, Jean made sure she had set them up for success—now and in the future. Here are five tips if you’re ready to start this conversation with your own kids or plan out your own financial literacy curriculum.
1. Take advantage of any and all available tools.
From piggy banks to savings accounts to the internet, there are plenty of resources that you can use to get started. For example, Jean set up physical money jars for her kids when they were very young. Each of her children had three jars labeled: SHARE, SAVE, and SPEND. As they got older, they transitioned this same method to digital banking. Now, their allowance goes directly into their spend, save, and share accounts, but they can use a debit card to make purchases and an app to check their balances. She’s also leveraged things like a pachinko board (a popular Japanese arcade/gambling game) to demonstrate risk.
2. Don’t overthink your lesson plans.
- Give your kids time to digest these topics and don’t inundate them with too much, too soon. Some lessons can be five minutes—they will still have the same impact.
- When in doubt, consult the experts. For example, Jean uses YouTube videos that she vets ahead of time and uses them to inform her lessons and keep her kids engaged.
3. Start with the basics and go from there.
Some common, everyday things are completely foreign concepts to kids. Even if it feels like a no-brainer to you, the adult, kids will still need a full explanation. For example, one of Jean’s many lessons was to explain what a pay stub looks like and why what we think we make and what we actually take home after taxes are two entirely different things. Another financial-related matter is insurance. Kids will need a crash course on what insurances (health, life, home, disability, etc.) they’ll need throughout the years, who is paying for that insurance, and how to find the right policy without breaking the bank.
(Sidenote: Of course, topics like life insurance may not be appropriate for your little ones—but they should still have a general understanding of what insurance is and why we may need it.)
As your kids get older, you can start slotting in more complex ideas. Jean and her kids have discussed the projected salary of college graduates depending on what major they chose and some of the best ways for college kids to start investing. (She even taught them about buying a single-family residence near their college, renting out all the rooms to their fellow students, and having that rent pay the mortgage with some spending money to spare.)
4. Be open to your own continued education.
As the younger generation is learning, you as the “teacher” should also be learning. Jean shared that she had to “unlearn” some lessons her parents taught her when she was younger, whether the was due to technology changes, new information, or generational conditioning.
5. And last, but not least…BE CONSISTENT.
Consistency is the key to success in most things in life, whether that’s practicing a sport, mastering a new instrument, or getting good grades. By keeping your financial literacy lessons contained to a set schedule, you’ll be coaching your kids in more ways than one.