Here’s how to raise financially healthy kids – and avoid mistakes

Here's how to raise financially healthy kids - and avoid mistakes

You want your kids to have healthy financial lives, but knowing how to make it possible can leave you stunned.

This can be especially difficult if you have your own financial difficulties. Yet teaching them as early as possible can make a difference.

“There is a lot of misinformation that will come out later,” said Sheila Barr, former president of the Federal Deposit Insurance Corporation, an independent agency that insures US banks.

She is also the author of children’s books that focus on money lessons. This week saw her latest releases – “Billy the Boring Blue-Footed Booby” and “Princess Persephone Loses the Castle”.

Here’s how to get your kids on the right track and what to keep in mind.

be aware of your behavior

Children learn by watching their parents. Yet many people set a bad example when it comes to money, said Barr, a member of the CNBC Invest in You Financial Wellness Council.

“A lot of adults don’t always manage money as much as they should,” she said.

For example, if you buy something beyond your means or from an impulse store when you go out with your child, they will look at it.

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If you are stressed out about money, accept it. This can prevent you from imparting healthy behaviors to your child, said Melanie Mortimer, president of the Securities Industry and Financial Markets Association Foundation. The organization is the investor and financial educator arm of SIFMA, a business group representing securities companies, asset management companies and banks.

“It’s one of the least recognized barriers to better financial literacy in this country,” she said.

“It’s really important to be comfortable, and separate your own bills and debts from the need to educate your child, I think that’s important.”

don’t lecture

Talking about money with your kids is important, but how you do it is also important.

“Don’t be judgmental, don’t finger,” Barr said.

Instead, have a conversation around the dinner table about things like saving money and budgeting. With young children, stick to simple concepts and as they grow older explore things like allowances or money making ideas.

Use real examples

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When shopping, show them you are paying for the items and even compare the store.

If you are using a credit card, be sure to explain how it works.

“It doesn’t really correspond to what mom and dad are spending with this card, but their hard earned money on the back of this card is actually going to pay for the purchases they made,” Barr said. .

acquire help

Introduce investment concepts

By age 9, children usually begin to use fractions and percentages. Mortimer said now is the right time to start teaching him how to invest.

The SIFMA Foundation’s stock market game is used in schools and through community organizations, and is also available to individuals on its website.

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