Financial Literacy for You and Your Child

Financial Literacy for You and Your Child – Charlotte Parent’s Mom Matters Recap

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Financial Literacy for You and Your Child – Charlotte Parent’s Mom Matters RecapEarlier this summer I was fortunate enough to attend the Charlotte Parent magazine’s Mom Matters luncheon on financial literacy. I learned so much from the luncheon speakers, Court Creeden and Sandy Wheat, and I was shocked by some information they provided.

Below you will find my recap.

Financial Literacy for You and Your Child – Charlotte Parent’s Mom Matters Recap

Court CreedenCourt Creeden, Founder of Parent Financial, opened the luncheon discussing some starting points to get your family on the right track with financial planning. Obviously, Court could talk for hours on the subject, but he did a great job breaking it down into five important areas.

  1. Get a clear budget in place. The majority of our expenses each month are fixed. Parents get into trouble by not tracking the categories that can really add up — whether it’s dining out, kids events or shopping. Find the two or three areas that you tend to overspend, then put yourself on a limit for those areas and track expenses to make sure you don’t overspend. (Download this free Monthly Cash Flow Plan from Dave Ramsey. This form allows you to plan out, in advance and on paper, where every dollar will go for the month).
    Get a clear budget in place.
  2. Build a safety net. Determine your fixed monthly expenses and work to build a minimum of three months in savings to cover this amount. Once you hit this goal you are in a place to begin to increase savings into retirement and college accounts.
  3. Get covered. Very few families are properly insured, especially in the areas of life insurance and long term disability insurance. Make sure you know how much you have and how the coverage works. Many parents require coverage outside of their group plan to properly protect their family. (See example below on calculating the amount of insurance needed.)Your Anticipated Expenses
  4. Sit down with an attorney. Put in place a living will and a durable power of attorney for health care. Life happens and these document need to be in place.

    What happens if you die without a will? (in North Carolina, each state varies)

    If you die without a will you authorize a probate judge to appoint anyone of his/her choosing to administer and distribute all property left by you.

    If you are survived by one child, your spouse will receive only one-half of your separate property. If you are survived by two or more children, your spouse will receive only one-third of your separate property.

    When each of your minor children attain the age of 18, his/her share is to be paid to him/her outright at that time. No consideration shall be given to his/her financial or emotional maturity.

    You forfeit your right to appoint a guardian to raise your minor children and direct the Probate Judge to make that appointment without the benefit of knowing your wishes.

    How scary is that?!? If you don’t already have one, go out and get a will drawn up, today!

  5. Wealth is about starting early and being consistent. Your ability to save an extra $50-$100 per month might not sound like a lot, but over 30 years it can be the difference between being able to retire or having to rely on your children to provide for you in your later years.

Court Creeden, Founder, Parent Financial
Court is the founder of Parent Financial, a Charlotte-based financial planning firm that advises parents on saving for college, retirement, insurance reviews, and estate planning. Court has been featured in the Wall Street Journal, MSN Money, Dow Jones, Time and multiple parenting magazines for his work with moms and dads.

Connect with Parent Financial on Facebook.

Sandy WheatSandy Wheat, Executive Director, NC Council on Economic Education discussed raising money smart children. I was particularly interested in what Sandy had to say, because I wasn’t taught how to manage money when I was younger. When I started off on my own I made poor financial decisions, and I do not want my children to follow in my footsteps.

Sandy started off her talk discussing the importance of examining your own attitudes and behaviors about money. You can’t teach your children financial responsibility if you aren’t already financially responsible. Do you have a budget? Are you saving for short-term and long-term goals? Do you pay yourself first? If not, take the time to become financially literate and begin practicing good money habits.

It is also imperative to involve your child(ren) in family financial planning and discussions about money. Show your children the family budget and talk about each item on the list. Talk about spending wisely and the importance of staying within the budget.

Wants Vs. NeedsIt’s crucial to teach your children the difference between Needs and Wants. This distinction is essential for developing good money management skills and differentiating between a luxury and a necessity. Sandy suggested a family activity where you make a list of everything the family can’t live without (food, shelter, electricity, etc.) and explain these are needs and money must be spend on them first. Then make a list of wants and discuss the difference between the two groups.

What you can do to raise Money Smart Kids?

  • Give your child an allowance and let him or her be in charge of spending it
  • Provide opportunities for your child to earn money
  • Teach your child to save toward short- and long-term goals
  • Show your child how to be a wise consumer
  • Set a good example with responsible financial behaviors
  • Encourage your child to take personal finance classes
  • Utilize a spending plan, make sure you children see this in action
  • Teach your child about compound interest
  • Teach your child “PAY YOURSELF FIRST” (Book Recommendation: The Teen Money Manual: A Guide to Cash, Credit, Spending, Saving, Work, Wealth, and More by Kara McGuire)

Do not save what is left after spending,
but spend what is left after saving. – Warren Buffet

Sandy’s tips to Raise Money Smart Kids

1. Make sure you child understand delayed gratification. Recent research indicates that very young children who had to earn or wait for rewards were more financially responsible in adulthood.

Raising Money Smart Kids ages 2 to 6

2. Teach your child the concept of Compound Interest. Those who understand it earn it, those who don’t pay it.

Raising Money Smart Kids ages 9 to 12

3. Read The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money, by Ron Lieber.  The title says it all.

Raising Money Smart Kids ages 13 to 18

4. Read Three Cups, by Tony Townsley and Mark St. Germain, to your child. This will teach and reinforce the concepts of spend some, save some and share some to your child.

5. Visit jumpstart.org to download “How to Raise a Money Smart Child-A Parent’s Guide.”

Sandy Wheat, Executive Director, NC Council on Economic Education
Under her leadership, the NC Council on Economic Education’s program participation has grown exponentially. Sandy has also played an integral role in the incorporation of the NC Jump$tart Coalition for Financial Literacy for Youth. Sandy was recently appointed by the Governor of North Carolina to serve on the North Carolina Financial Literacy Council, which studies financial literacy efforts across the state.

Connect with NC Council on Economic Education on Facebook and Twitter.

Financial Literacy for You and Your Child

Disclosure: Charlotte Parent’s Mom Matters: Financial Literacy for You and Your Child is a sponsored post. Although I was compensated by Charlotte Parent with a payment, product, or something else of value in exchange for writing this post, all thoughts and opinions are my own. 

Comments 13

  1. These are great tips. My kids understand the value of a dollar and they love to do chores to earn money for things that they wish to purchase.
  2. These are all such wonderfu tips. It's so important to know how to save. I'm all about saving, so I'll save any way I can. My girls already havce money in the bank and are saving up all the time.
  3. I really need to put these tips in place. I have a 15, 5 and 7 year old that we could implement these with.
  4. It is so important to teach your kids about money. We started when they were little and now they are frugal teenagers.
  5. I remember taking a financial literacy class and learning so much. I still have a lot to learn. Its a shame these things are not taught to the younger generation while in school.
  6. So important to start teaching them the value of saving. My son his 8 and when he gets money for his birthday or Christmas he doesn't try to spend it all at once. I wish I had learned that at an early age too.

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