How to talk with your children about money and investing

Whitney Houston once said quote I believe the children are our future teach them well let them lead the way and I agree but when it comes to their finances are the children being taught well that's the big question here and according to a Pew research study only 45% of young adults age 18 to 34 not exactly children but still important they're completely financially independent from their parents so how can parents go about raising financially Savvy kids today joining me now we've got Rachel Cruz who is the Ramsey Solutions personal finance and budgeting expert and author there you see the cover of the book new book I'm glad for where I am oh man that's got gratitude written all over it Rachel thanks so much for taking the time thanks for thanks for having me a lot of people a lot of parents new parents out there trying to figure out what's the best stepping stone that they can set up within their household to teach their kids about financial planning and just begin financial literacy at a basic level that leads to Big outcomes as well yes you know it's interesting when I talk to people everyone says oh my gosh I wish I knew this stuff when I was in college or I wish I could go back and not take out the debt that I took out or I wish I started investing early and so really implementing these principles with your kids keeping an age appropriate is really important but you know you can start as young as four and five years old understanding that money comes from work right and you have them do some chores around the house they get paid on it some commission we have plenty of those grown up and I know we all did right and so yeah and you teach them to give to save to spend so it can be very age appropriate but as they get older and as they're teenagers talk to them about investing what compound interest is you know even show them some real life examples of your bills right of how much lights costs you know throughout the month so again so many parents I think the generation the Boomers I feel like it was a little bit taboo still to talk about it but I feel like our generation is a little bit more open and so having these conversations with our kids I think is really important yeah the transparency it seems NOS no bounds right now so this is what it needs to extend into next you know in raising children to be financially independent we just rattled off that stat a moment ago from Pew research what is the best way and how are you hearing people actively going about explaining what real Financial Independence looks like to their kids their family members yeah you know as a parent it's it's interesting cuz you want to help your kids right you want to you want them to have a great life but there's that fine line between enabling and then this idea that like they lose their dignity and so being able to say hey as an adult this is what life looks like but what's hard is for so many you know young adults they go into the workforce expecting a higher salary expecting to be paid more and not realiz realizing how much expenses cost and then you're leaving a lifestyle that you're parents took 30 40 years to build and you're having to start over so I do think lifestyle expectations is big but you know inflation is high like I mean there's some there's some struggles and some hurdles I think for this generation but overall the intentionality of understanding what do I do with this paycheck and how can I live within my means we we saw the piggy bank there on screen I mean there there's no real reference anywhere in here in this question to a piggy bank but that's a lot of us in our early experiences in really budgeting and really saving as well here where are the missteps happening that you're seeing though in how the next generation is being educated about savings about investing and and those of course smart spending habits that can be implemented as well yeah you know I think one of the biggest hurdles that I see and as for Ramsay we're known as like the get out of debt crew I feel like of helping people but I do think empowering a generation to understand to let your money work for you don't let it work for the bank and what is it look like to live within your means and then you can take some of that margin invest early and consistently because you can set yourself up it's not an overnight success story it is a it is a marathon when it comes to your wealth building uh and winning with money but it's something that you can do and the education sadly is not there so I do think some parents feel like oh my gosh we've been terrible with money who am I to teach my kids when it comes to this but I would say step in even though you haven't been perfect you can change your ways and your example is huge but also it is your responsibility as a parent so step into those conversations all right there's a lot of self-help Financial books out there I mean you could rattle down the list but I'm excited to talk about this one here because it's got a an ethos of gratitude tell us about this I'm glad for where I am as the title our folks are seeing it there on the screen right now yes it's a little different it's a kids book but I have three little ones at home and you know money I think it's important we talked about some of the tactics of teaching them but there's also an emotional side of money that I think is as important and so these things like contentment and gratitude and generosity and how do you Foster that emotional piece of keeping money in its proper place and so gratitude is one of those things that I think helps with contentment and it helps with generosity and I mean we we enjoy adults who are grateful right so you want to be able to raise your kids in such a way that when they're adults that's what's magnified and so uh having something easy and I again I have three little ones at home so for all you parents with little kids it's a short book it's easy to read uh but it has a great message of just that Foundation of where our gratitude is you know it it kind of brings back the memory of my mother always telling me and my sisters be happy with what you have uh and then also giving us our tour assignments as well Rachel Cruz Ramsey Solutions personal finance and budgeting expert thanks so much for taking time yeah thanks thanks for having me

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Id: Y7DB4J5zBrQ

Length: 5min 6sec (306 seconds)

Published: Sat Apr 20 2024