HOUSTON – Bad habits are hard to break, explaining to our kids early on how to save and spend money is critical.
Teaching kids the value of money at an early age, including the difference between a want and a need is crucial as they start to develop spending habits.
Private wealth advisor with Ameriprise Financial, Trevor Shakiba explains.
The first point is that you absolutely have to bring it up. You'd be shocked with the amount of families that never talk about money... you have to bring it up, good or bad," said Shakiba.
5 BIGGEST MISTAKES PARENTS MAKE WHEN TEACHING KIDS ABOUT MONEY
NEVER ACTUALLY TALKING ABOUT MONEY
- This is a massive mistake
- Trevor can't remember ever talking about money growing up, although he knew they didn't have much
- Bring it up, good or bad
NOT DISCUSSING IT EARLY ENOUGH
- According to a Cambridge study, kids can grasp basic money concepts between 3 and 4 years old
- By age 7, future behaviors regarding money have developed
- Only 4% of parents said they started discussing financial topics with their kids before age 5
NOT TALKING ABOUT SAVING MONEY
- This is the secret
- Help them understand the difference between wants and needs
- Let your kids see the money being saved in a piggybank or in TJ's case a dump truck bank
NOT EXPLAINING AN ASSET VS. A LIABILITY
- An asset increases in value; a liability decreases in value
- An asset pays you in the form of dividends, rent and cash flow
- Cask flow is king
NOT ILLUSTRATING HOW IMPORTANT TIME IS
- Besides living below your means, starting early is maybe the most important concept to convey
- Waiting just 10 years can equate to a 6-figure difference easily
For more information or to request a complimentary consultation with The Shakiba Group, click here or call 281-724-9917.
The initial consultation provides an overview of financial planning concepts. You will not receive written analysis and/or recommendations.
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