Where to start if you want your kids to grow up financially savvy
You can raise financial-savvy children by avoiding lectures and instead starting with an allowance.
Rose Palazzo is now Head of Financial Planning at Morgan Stanley. MoneyGuideEnvestnet, an online advisory platform. Experiential learning is what kids remember the most.
Palazzo suggests that parents give allowances to their children, and allow them the freedom to use it as they wish. They can practice and learn the art of setting goals.
CNBC Make It’s founder, Sheryl A. Smith tells CNBC Make It: “Help young children understand the value and how to balance what they need in the near term versus those that may be more long-term.”
She recommends showing kids how to set goals to save money for “that extra toy or event” and working with them to get there by setting aside a portion of their allowance.
Palazzo tells us that “putting the money away, and then being in a position to buy that toy… that’s something they are going through.” It can make a big difference for kids to actually put it in practice.
Palazzo says that there is no “right age” for teaching money lessons to children, but she suggests starting early when it comes to teaching savings. You can start to teach them more complex topics as they reach their teens. the power of compounding interest.”
A strong financial foundation can be a great investment. Warren Buffett, the legendary investor and investor, credits his early lessons in money management with setting him up to succeed.
Buffett said he is “lucky” to have Berkshire Hathaway’s parents teach him financial basics when he was young. annual meeting in 2014. He said that financial literacy was something he learned at the dinner table.
Buffett claimed that he got “letters daily from people who have committed some type of financial lunacy” and didn’t realise that they were wrong, because their parents had not taught it.
You can enjoy the rest of your life by digging yourself out from the financial blind spots that can be caused by financial incompetence. [life]Do it,” he stated.