Contributed by Susan Michel, member of EO New Jersey and founder and CEO of Glen Eagle Advisors, which provides advice on investment management and financial planning.
Raising children in an entrepreneurial family is challenging. You want to be a responsible parent and raise financially savvy kids, but where do you start?
April is National Financial Literacy Month, the perfect time to focus on the importance of teaching money to children. Whether intentionally or not, each of our unique relationships with money shapes our children’s relationship with money. How we earn, use, and manage our money largely depends on the information we received from our parents in our childhood.
With the current pandemic, many of us are grappling with having our children at home and the ongoing challenges that come with virtual learning. There are plenty of creative and engaging ways to teach Lifetime Lessons outside of the classroom – even if you’re not a certified teacher!
While many parents understand the importance of teaching their children money, they are often unsure of where or how to start. Here are four steps you can take now to teach your children about money:
Unfortunately, most children grow up without financial education, whether at home or at school. Since 2016, not a single US state has added personal finance to its K-12 standards. This lack of financial resources has negative long-term effects. For example, nearly 25 percent of Millennials spend more than they make, and 67 percent of Gen Y have savings of less than three months in their emergency fund.
Studies show that children benefit from learning how money works from an early age. These are just a few of the benefits of being a financial literacy:
It is very important to teach financial literacy to our own families, especially our daughters. Studies consistently show that women are less financially literate than men, even after taking marital status, education and income into account. This gender gap in financial literacy is observed throughout the life of women. We as parents can stop this trend and pass on good financial habits to our children.
Parents who talk to their children about financial issues at least once a week are much more likely to have children who say they are smart with money (64 percent versus 41 percent). The small steps we take today can have a large, measurable impact on our children and their future success.
Susan Michel is the founder and CEO of Glen Eagle, an award-winning financial services company providing retirement benefits to business owners and asset managers. Glen Eagle takes an educational, holistic approach to achieving its clients’ long-term goals. Glen Eagle is a WBENC certified women’s company. Susan is a board member of the EO chapter in New Jersey.