Lessons About Money Can Be Priceless Gifts to Children
Lessons About Money Can Be Priceless Gifts to Children
Submitted By : Roy Salas Edward Jones
Father ’ s Day is almost upon us . If you ’ re a dad , you certainly may enjoy getting cards and gifts , of course . But , over time , you will gain even greater satisfaction by what you can give your children – such as some valuable financial lessons . These lessons can include the following :
• Setting goals – If you are contributing to an IRA and a 401 ( k ) or similar employer-sponsored plan , explain how you build these accounts now , while you are working , so you ’ ll have enough money to enjoy a comfortable retirement someday . And you can bring your children into the picture , too , by telling them that another financial goal is saving enough to help send them to college or to further their education in other ways .
• Value of understanding the financial markets – You may actually be quite surprised at how interested your kids are in investing , especially the concept of “ owning ” companies through stocks and stock-based vehicles . Depending on their ages , you might even want to show them the progress of your own investments and describe , in general terms , how different events can cause the markets to rise and fall , especially in the short term . You could even discuss the difference between the basic types of investments , such as stocks and bonds .
• Putting time on your side – You might want to emphasize the importance of patience , and how investing is not a “ get-rich-quick ” scheme , but a process that requires decades of diligence and persistence . Let your children know that it ’ s of great value to start investing as early as possible , so you can put time on your side , giving investments a chance to grow .
• Living within your means – We all know that you can ’ t always get what you want . Stress to your children that you can ’ t just splurge on big purchases whenever you feel like it , because such behavior can lead to bad outcomes . Use concrete examples : If you have a car that ’ s several years old , tell your children that it would be nice to have a new one , but you simply must wait until you can afford it .
• Paying debts on time – Tell your children that , no matter how good a saver you are , or how thrifty you try to be , you still have debts , such as your mortgage payment , and it ’ s important to pay these debts on time . You may not want to get too detailed about the consequences of missing debt payments – bad credit scores may not be that easy for children to understand – but you can certainly mention that if you ’ re always late on payments , you might find it harder to borrow money when you really need it .
By sharing these principles with your children , you will , at the least , give them something to think about , and you may well find that you ’ ve helped start them on the path to a lifetime of making solid financial moves . And who knows ? If they truly master the ideas you ’ ve taught them , one day they might give you some really nice Father ’ s Day gifts .
This article was written by Edward Jones for use by your local Edward Jones Financial Advisor .
MOMENTUM / Summer 2018 31