Wanting to provide guidance and support to those you care about is something that all parents can relate to. We as parents want to support them with advice and our own learned experiences.
And that’s truly how I feel about my clients. I want my clients, young and old, to feel they have an expert in their corner ready to guide and support them through decisions big and small.
I believe learning financial lessons and implementing smart financial plans early in life is so important for setting children (and my clients and my clients’ children!) up to long-term financial success and independence.
Let’s take a look at some of the key lessons I learned that helped me understand how to make smart and informed financial decisions from a young age.
Expose Your Children to Think About Finances Early On
Many parents’ top concern is saving for a child’s education. Whether that’s tutors, private school, or college, I love working with parents and their children to help guide them and provide support.
I love letting the kids know why I’m there and how important it is to plan in advance for significant events and ongoing expenses.
When I was in high school, my parents and I discussed this often, and our dialog around this topic was a gift they gave me starting very early on. It continues to serve me well in all areas of my adult life, and proved formative in my career and personal decision making.
You don’t want children to feel immense pressure. But, providing them with financial knowledge and literacy early on can help them maintain a successful financial future.
Emphasize the Importance of Earning and Saving Money
When I secured my first summer job, my parents made an agreement with me that they would match any money I earned and saved from the job in a college savings account – much like a 401(k) match plan from an employer.
I saw this as a big motivator to earn as much as possible and it also helped to teach me the basics of savings and 401(k)s in an accessible and understandable way. I saved roughly half of my earnings, and my parents kept their word and matched the amount.
It was so rewarding to feel myself moving closer to my big goal of paying for my senior year of college myself.
Have Open Discussions
When it came time to pick a college, my parents and I talked at-length about how price should affect my college decision. For us, finances were just as important as the school’s academics, the social life, and the location.
These types of conversations were so important for teaching me about how to discuss and evaluate large financial decisions for both short- and long-term success.
At first, I had my mind set on attending a large private university. The school spirit and camaraderie held a lot of appeal for me.
However, my parents and I had a serious discussion about the wide array of factors that can affect a decision like this. In addition to exploring the costs and benefits of the private school, my parents also supported me in investigating the benefits of other potential school options.
They encouraged me to research other options in order to compare and understand the financial differences of other schools. They also encouraged me to apply to the local public university.
I was accepted into both the private school choice and to the local university.
Then, my parents and I came together and looked carefully at the numbers related to each choice. They showed me how much they had saved for my college education and how much I had saved along with what scholarships I’d been awarded.
Then we looked at the big picture together. I would’ve been able to attend the private school for four years if I took out $60,000 in student loans.
On the other hand, my parents and I combined had enough money saved to pay for all four years of the State University without incurring any debt. And at the same time, I could afford to realize another dream I had: to buy a Jeep and put a downpayment on a condo.
My choice became clear: the public school would be the best financial choice that would also allow me to fulfill multiple goals. The open discussion with my parents without judgments of my decisions was crucial to me making the smart and informed choice.
Knowing that you have support and experienced individuals to guide you through these decisions makes the transition to making them on your own throughout your life much easier.
Transparency and Guidance Make Financial Planning Manageable and Understandable
It’s never too early to start the type of dialog that teaches these life lessons to your kids.
If you’d like to schedule an initial consultation with me about saving for college, or any other financial goals your family has, don’t hesitate to reach out.
No matter how simple or complex your goals, I would be happy and excited to help.
