All of us have so much information at our fingertips, but how can we know what information is accurate? Jason Dobrzynski, CFP®, CMFC® and Maralynn Kearney, MBA, CFP® of Corsalus Financial join us as a guest contributors to help us weed out incorrect information and encourage our kids to become financially-aware adults.
Helping Young Children Learn What Money Is and What It Can Do
It’s never too early for children to learn the basic principles behind money: as a means to exchange something you have for something you want. By bartering with your toddler, you can get them started on the concept of exchanging money. For example, you can set up a play store at home where they can “purchase” items they want.
Once your children are a bit older, you can build on this initial knowledge by involving them in household purchases. They can use math and financial skills by adding up the price of items at the grocery store or choosing between different products to ensure that the total stays below a certain amount. You can even do that from home by looking up the prices of different size boxes of the same item to determine which is the best deal.
Guiding Adolescents and Early Teens to Save and Live Within Their Means
Tweens and teenagers are better able to conceptualize cost and value, which makes this the perfect time to create habits that will help them live within their means. If your child receives an allowance, you can use that as an opportunity to shift the cost of certain treats and extras to them so they can start to manage spending.
For example, you may be able to show your child that one week’s allowance is enough to go to the movies twice or purchase a toy they’ve been eyeing, whereas buying a new video game or larger-ticket item will require them to save up two- or three-weeks’ allowance. Not only can this help your child learn to prioritize among various wants and delay gratification, but using a cash allowance can also discourage overspending.1
Encouraging Late Teens to Build Credit and Invest
Saving and living within one’s means are important lessons to apply during every stage of life. But when teens are preparing to enter adulthood, it’s also crucial for them to understand the role credit can play in everything from hiring decisions to purchasing their first home.2 By establishing healthy credit habits, your teen can get an early start on building a solid credit score. They can start by taking out a low-limit credit card for incidental expenses and paying it off each month.
One of the final steps in creating financially-literate children is to educate them on investing. Fortunately, investors don’t need to call up a stockbroker to check daily prices or make trades anymore. Having an internet connection gives you full access to data, and many online brokerage accounts can be opened with a relatively small initial contribution. By working with your teen to evaluate potential investments, you can help them capture some of the most valuable investing years of their life.3
About Corsalus Financial
If it’s in your heart, it should be in your plan!™
Jason Dobrzynski, CFP®, CMFC® and Maralynn Kearney, MBA, CFP® are LPL financial advisors and investment planners. The Corsalus Financial office is located in Oak Brook at 1220 Kensington Rd Suite 200C.
We are a team who strives to make a difference in the lives of others, as well as in the community around us. We understand that ‘life is about the moments’ and we value how our families choose to spend their time. We work with people to uncover and understand the things that are closest to their hearts and that they are most passionate about.
After prioritizing these important matters, we collaboratively work with families to create a financial plan to help them envision and understand how they can get there. And, we remain in their corner to help along the way. Our goals are centered around enhancing the financial lives of individuals so they are living their lives to the fullest and feeling confident about the financial decisions that they make.
We not only want to celebrate the accomplishments that happen along the way in our clients’ lives, but we also take the time to recognize the ‘little things’ that go on because they sometimes matter the most.
If you have questions about a financial plan for your family or how to raise financially aware kids, please check out our website at www.corsalus.com or contact us at info@corsalus.com.
Important Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. Investing involves risks including possible loss of principal. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
1 https://www.thebalance.com/how-to-switch-to-cash-only-for-your-budget-2385691
2 https://scholars.org/contribution/how-do-employers-use-credit-reports-hiring-decisions-and-how-can-process-be-improved
3 https://www.themint.org/kids/compounding-calculator.html
Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC.
