Living a Protective Life: Teaching Children About Financial Planning

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My grandfather worked all the way up until he was near death. He and my grandmother never had a retirement plan, and while I see the value in working as long as it makes you happy, I also see the tremendous benefit of living a protective life and teaching my children about financial planning.

I never took a consumer class and no one ever explained financial planning to me. That is probably why my husband and I were in such financial turmoil when we married. However, having lived through bankruptcy, we are extremely aware of the need to educate our children about finances and how to use money wisely.

5 Ways to Teach Your Children about Financial Planning

My children love to spend money. They know they will get cash for Christmas and birthdays and already have a list of “wants” even before they receive the gift. This makes alarm bells ring loudly in my mind.

They are spending money mentally before they even have it.

How many times have I done the same thing and ended up making poor decisions? Oh, the pain of living in debt! I do not want this same curse on my own children. I must teach them by how I live and guide them to make wise choices.

Live Simply

We live in a small home and do not drive fancy cars, but we have everything we need. To avoid being drawn in by marketing, we rarely visit the mall, do most of our shopping online, and toss catalogs as soon as they arrive.

Also, our children do not get everything they ask for, and we often discuss what it means to be “fortunate.” Our goal as parents is to teach our children that we might not have everything we want but we have much more than others and our needs are completely met.

Pay Cash

As a child, I thought having checks meant you had money. I am very aware of that misunderstanding each time I use my debit card. I do not want my children to think this plastic card means there is an endless supply of money available.

Because I believe using cash is essential for making wise financial decisions, I often hand my children the money to pay. We discuss sales prices and prioritizing what we purchase based on need and then want.

Save

My oldest son will spend every dime he has. Still a penny remaining? “How can I spend it?” he asks. My eyes roll.

So, anytime we find change, it goes into a counting jar. I want them to see that a little change here and there adds up to big change.

Also, we practice saving ten percent of everything. My husband and I want our children to save ten percent, give ten percent, and live off 80 percent.

Give Generously

When the children start to ask about getting a new toy or electronic, I ask them to do one good deed for each item they place on their list… not as punishment, but to help them realize that life is more about giving than receiving.

We seek out projects were we can give from what we own as well as through financial offerings.

Be Prepared

Life is full of unexpected twists. Being prepared for the future… whatever it holds… is extremely important. I must know how much life insurance I will need in order to not pass a financial burden on to my children. Likewise, I need to teach them that despite how uncomfortable it is to think about loss or tragic circumstances, these things happen and we must be prepared.

What about you?

Are you a protective parent? I have shared my ideas but would love to hear from you. In what ways are you training your children to live a financial fit lifestyle?

If you need more inspiration on ways to guide your family’s financial future, the Protective Learning Center offers an abundant list of resources for every stage of life planning.