Thomas Batterman Discusses the Importance of Teaching Kids at a Young Age About Finances
Navigating the financial landscape is a challenging endeavor; however, taking the necessary steps to prepare younger generations well in advance will allow them to be financially independent later in life. Thomas Batterman, an expert fiduciary and financial advisor, takes the time to discuss the importance of teaching children how to manage their expenses and use money responsibly.
If children develop positive financial skills from a young age, they are more likely to take on the challenges of adulthood with confidence. In a time where online shopping, credit cards and internet banking reign supreme, children are often not exposed to the physical exchange of money making it difficult to understand monetary value. This may bolster the belief that money is an unlimited resource, something parents need to discourage from an early age. Batterman suggests getting your kids excited about money management by giving them a piggy bank. Providing incentives for financial acquisition, teaching them denominational value and addition will be valuable tools for them as they begin to increase their cash flow.
From an early age, teaching your children restricted buying lessons will be an important basis for their financial education. If your child learns to delay immediate gratification of a purchase, and can instead successfully save to buy an item, it may be a predictor of how successful they will be as an adult. For example, have your child set a savings goal for a new item by helping them determine a budget and how much to save each week. Check in periodically and evaluate how they are doing toward reaching that goal. If they are not meeting the objective, have a conversation discussing the reasons and give encouragement to get back on track. Likewise, take the time to discuss the importance of saving a portion of any money earned to instill the value of having a financial safety net.
Setting a Positive Example
Teaching your children about finances is all about setting a positive example. Chances are you are probably already a savvy shopper, so Batterman suggests instilling those values in your children when you go shopping. Be sure to educate them on your purchasing choices and why you chose one item over another. Being able to point out that the generic brand has the same ingredients as a branded product gets rid of the branded bias that many consumers often fall prey to. And, instead of telling them that “we can’t afford this right now,” try saying “we haven’t budgeted it in for this month.” This type of re-enforcement lets them know that it may be possible to purchase but will mean sacrifices in other areas.
There are so many life lessons to teach our children, including money and finance. We may not get every lesson right, but Batterman explains that talking about money openly and early provides your child with a solid foundation for financial success in the future.