How Parents Can Prepare Kids for Financial Success

by Ron Haynes

Taking the time to teach your children a few financial lessons can insure they become fiscally responsible adults. Though nothing is set in stone – no one is doomed because of their parent’s choices – parents are in a unique position to deliberately mold their children’s financial attitudes and behaviors. And it all begins with talking and setting a good example.

Talking to your kids about money

Recent studies indicate that parents who regularly talk with their kids about money tend to raise much more financially responsible adults. Those parents also tend to encourage their children to set money goals and work towards those goals.

Setting a financial example for your kids

Just as important as talking to your kids about money is setting a good example – practicing what you preach. Children are keenly aware of hypocrisy and if you talk about living below your means but constantly don’t live that principle, your kids will take notice.

What behaviors should you model?

One study performed by Maritz, a sales and marketing company, found that financial achievers exhibited at least five of the following behaviors after opening an IRA or signing up to participate in an employer’s 401(k) or 403(b):

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  • Live within a budget such as YNAB
  • Track and control expenses
  • Save money by default
  • Live beneath their means
  • Regularly contribute to an employer’s retirement plan
  • Pay off any debt in a regular, controlled manner
  • Contribute to an IRA
  • Deposit money in a savings account automatically

The difference was the magic number of five. Those who performed any five of these behaviors were on track for financial success. Maritz classified those who only participated in four of these behaviors as just “dreamers.”

The key is to have already opened that IRA or to sign up for your employer’s retirement plan. It all starts AFTER that.

Start your Scottrade IRA today and set the example for your children.

Parent’s have a far-reaching effect on their children in so many ways and the money aspect of a child’s life is no different. By talking with your children about money and exhibiting the discipline to practice what you preach,  you’ll not only be financially better prepared in your own life, but you’ll potentially help your children learn the importance of being prepared themselves.

About the author

Ron Haynes has written 988 articles on The Wisdom Journal.

The founder and editor of The Wisdom Journal in 2007, Ron has worked in banking, distribution, retail, and upper management for companies ranging in size from small startups to multi-billion dollar corporations. He graduated Suma Cum Laude from a top MBA program and currently is a Human Resources and Management consultant, helping companies know how employees will behave in varying situations and what motivates them to action, assisting firms in identifying top talent, and coaching managers and employees on how to better communicate and make the workplace MUCH more enjoyable. If you'd like help in these areas, contact Ron using the contact form at the top of this page or at 870-761-7881.

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