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The Second Most Important Thing You Can Teach Your Children or Grandchildren

We all want our children and grandchildren to do well in life. The most important thing we can teach our youth is some sort of value system to help them make sense of life and orient them in the right direction. But what else? How do you spend your time with your little (or not so little) ones? You might help them with reading or math homework. You might take them fishing, work on a puzzle or craft, or play catch in the backyard. These are all great, but what if there’s something else that could change their life?  

The number one problem in today’s generation and economy is the lack of financial literacy.

ALAN GREENSPAN

 

Only 18% of students in US schools are required to take a personal finance course before earning their high school diploma.1 Increasing financial literacy helps students have higher credit scores, less debt, and more savings. Most of our young people are going out into the world woefully unprepared for the financial challenges of life. None of us would ever send our children out into the wilderness without some amount of instruction on how to pitch a tent, the importance of finding a water source, how to build a fire, what’s safe to eat, which plants are poisonous, what to do if they come face-to-face with a bear, mountain lion, or other predator, and much more. Yet, that’s exactly what most of us do when we send our children off into the world without any instruction in personal finance.

How do we know the lack of financial literacy is truly a problem? According to the American Psychological Association (APA), 72% of adults report feeling stressed about money. Ongoing stress about finances has been linked to migraines, heart disease, diabetes, sleep problems, and more.2 Those who experience significant financial stress are 13 times more likely to have a heart attack than those with minimal or no stress.3 Money concerns don’t just affect our health. It’s the number one issue couples fight about and the second leading cause of divorce. High amounts of debt and lack of communication about money are major causes of stress and anxiety around household finances.4

We all want our children and grandchildren to live a good and happy life. How can we do our part to help prepare them to make responsible financial decisions, even if we may experience some financial anxiety ourselves? I have a confession to make. As passionate about this topic as I am, even I got a late start on this. So don’t fret if your children are close to or at high school age. Remember, those who receive even some instruction in high school tend to have higher credit scores, less debt, and more savings. Here are 5 great resources to help your children learn about money and how to make smart financial decisions.

Practical Resources

Family-At-Home Financial Fun Pack (Click Here)

The Council for Economic Education tries to making learning fun with downloadable, age and grade appropriate packets for children. They contain learning activities, family activities such as stories and games, and additional suggested reading (books on Amazon, at the library, or ones you may already have on your bookshelf). The packets start at a kindergarten level and advance through 12th grade. This is a terrific place to start! 

Financial Football (Click Here)

This is a fun, interactive video game from Visa and the National Football League teaching players good money management skills. You select the difficulty level based on ages 11-14, 14-18, or 18 and older. You pick your favorite NFL team and run plays, but the success of the play depends on if you answer a question correctly within the allotted time on the play clock. This game is a LOT of fun…even for adults! If you’re not a football fan or want something more instructional, the site also provides “Lessons”, which are downloadable packets on various topics.

Monetta Family Newsletter, Games, and More (Click Here)

Monetta is a mutual fund family with a passion for financial literacy and educating kids about money. You can sign up for a quarterly newsletter designed to help kids learn about financial topics in a fun way. They’ll learn about important financial life skills, successful entrepreneurs, and there are jokes or puzzles to keep it light and fun. They also have links to various financial games online, a money guide for teens, and short stories. Everything is intended to help kids learn about money in a fun and practical way.

Dave Ramsey’s Financial Peace Jr. and Self-Study Programs for Middle and High Schoolers (Click Here)

Dave Ramsey has designed a kit for kids ages 3-12 that introduces the concepts of earning money, saving, giving, how to have fun spending within a plan, the dangers of debt, and the importance of integrity. The items are colorful and include an activity book, chore chart, give/save/spend envelopes and bank, story time book, and more. There are also online course materials for middle and high schoolers presented by Dave Ramsey and his team of experts. 

Family Board Games

Board games offer another great way to incorporate money lessons while having fun. Here are 6 games you could consider for your kids or for when the grandkids come visit. 

  • The Allowance Game by Lakeshore (Ages 5+) – Kids learn the basics of counting, earning, spending, and the importance of responsibility. 
  • Pay Day (Ages 8+) – Teach kids about budgeting, monthly expenses, making payments on debt, establishing an emergency fund, and more.
  • The Game of Life (Ages 8+) – Kids learn about major life events such as going to college, working, marriage, having children, and retirement.
  • Monopoly (Ages 8+) – This classic teaches the importance of budgeting, planning ahead, and making smart investment decisions.
  • The Stock Exchange Game (Ages 10+) – Kids learn about the stock market, building a portfolio, and risk vs. return. 
  • Cash Flow 101 (Ages 14+) or Cash Flow for Kids (Ages 6+) – The author of Rich Dad, Poor Dad created this game to teach kids about investing, real estate, and how to make passive income so they can “avoid the rat race”. 

I mentioned earlier that I got a late start on educating my own children, who are 14, 12, 10, and 7. My 14-year-old started asking me this year about saving and investing and it hit me that my time to teach her and her siblings is limited. This summer, I started teaching a 30-minute “money class” during weekdays before dinner. We’ve all really enjoyed it and plan to do it each summer going forward. Summer is a time for fun, relaxation, and discovery. But it’s also a perfect time for kids to gain some practical knowledge that will help them live a long, healthy, and happy life…not to mention a long and happy marriage. Whether you’re a parent or grandparent reading this, it’s never too late to start and anytime is a good time. Just start and you’ll be glad you did.

  1. https://www.montana.edu/urban/main_brief.pdf
  2. https://www.verywellmind.com/understanding-and-preventing-financial-stress-3144546
  3. https://www.eurekalert.org/news-releases/519780
  4. https://www.ramseysolutions.com/company/newsroom/releases/money-ruining-marriages-in-america#:~:text=According%20to%20a%20new%20survey,cause%20of%20divorce%2C%20behind%20infidelity.&text=Almost%20half%20of%20couples%20with,a%20top%20reason%20for%20arguments

Journey Beyond Wealth is an Investment Advisor registered with the State(s) of GA, TN, LA. All views, expressions, and opinions included in this communication are subject to change. This communication is not intended as an offer or solicitation to buy, hold or sell any financial instrument or investment advisory services. Any information provided has been obtained from sources considered reliable, but we do not guarantee the accuracy, or the completeness of, any description of securities, markets or developments mentioned. This content may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.