One of our core philosophies at KMH Financial Services, LLC. is the education of the client to make informed decisions. Sadly, not only does our school system rarely teach financial literacy but most families find it to be a difficult topic to discuss. Many young people leaving the nest for the first time are stuck navigating the complex world of finance for themselves. But there is a way to start early with the basics even if you don't want to discuss your specific situation with your kids, you can still teach them.
My kids are young. Both under 5 and my oldest daughter loves princess dresses. The dresses were gifted to us and they are her prized possessions that she puts on the moment she walks in the door. The issue becomes the wear and tear she puts on them. She gives little thought to a scraped knee through the fabric of the dress or catching the end on a toy. Needless to say, the dress is well loved and slowly unraveling. When she got her first rip in the dress she was un-phased. “Don’t worry Mommy, we can just buy a new one”. With Christmas around the corner, she is confident that a new one will appear.
You can imagine what followed next. This is the perfect time to teach your kids about money as a finite resource. I carefully explained that we couldn’t buy a new one because we needed the money for other things….”like what?”…food, gas, school. “Can we go get some more money from the machine (ATM)?” No that’s the same account. The same money that we need for all the other things.
After a lengthy discussion, the conclusion was her vow to take better care of her dress since it would be the only one she gets for the foreseeable future...(i.e. until a grandparent buys her a new one). Even though she is so young, she was able to grasp the concept that this was it. There is only so much money and she better take care of what she has.