Financial literacy is not something that is automatically known at birth. Instead, it must be taught. Finances can impact nearly every aspect of your life. Talking to your kids about finances and how to grow wealth early on is key.
Parents can help build generational wealth by teaching their children financial literacy, including money values, habits and principles.
Ruby Taylor, founder of Financial Joy School, helps develop financially literate, empowered and joyful children. By teaching children financial fundamentals, the Financial Joy School aims to empower underserved communities with financial knowledge and tools. The program makes financial education engaging, accessible and enjoyable.
Taylor spoke with 21Ninety to provide mothers with some tips and suggestions to teach their children financial literacy.
Treat Money as an Ally
One key financial management principle to teach kids is that money is their friend.
“Money is like that dope, reliable friend who’s always got your back, but only if you treat it right,” Taylor said.
Children should not fear money. Whether a child has a fearful or confident mentality toward money depends on their upbringing and how they have seen their parents manage finances.
“Instead of fear, let’s embrace it as a powerful ally that enables us to have fun, create stability and make a positive impact on the world,” Taylor said.
Respect Money
Parents can set the stage for a brighter financial future for their children by healing from their own financial trauma. In order to create a new, healthy relationship with money, it requires centering healing and respect.
“Many Black parents grapple with a legacy of financial trauma,” Taylor told 21Ninety. “How money was handled in their families could create a backdrop of either stability or instability, peace or turmoil.”
Respect money and your personal history with it. This means acknowledging how money influenced your upbringing, confronting those experiences, healing from them and understanding that they belong in the past. This journey of healing and respecting money will alleviate the financial stress you inadvertently pass on to your children.
Prioritize Growth
Any friendship worth having will grow in time. If money is a friend that you want to keep around, parents should teach their kids how to make their money grow.
“To help it grow, children must learn to invest wisely,” Taylor said. “With smart choices, money can definitely sprout from your investments!”
Taylor encourages parents to teach children about long-term stocks, bonds, real estate and the adventurous world of entrepreneurship.
Inject Fun Into Finances
One idea for making finances fun is to host a family game night centered on money habits. The Legacy! Card Game is a resource to invest in your family’s financial literacy. The game provides tools aimed at catapulting financial wellness across generations. It is also a way for families to bond while learning about finances.
The Financial Joy School platform also offers a plethora of resources tailored to various learning styles and ages, ensuring that everyone from toddlers to grandparents can find something valuable.
“From interactive courses and workshops to insightful webinars, we equip families with the knowledge and tools they need to pursue financial wellness together,” Taylor said.
Make Financial Wellness Practical
Taylor encourages parents to have kids earn money through chores. They can divide their earnings into four categories: investing, saving, spending and charity. Open separate accounts for each category and engage them in discussions about their financial decisions.
“This hands-on approach is the foundation of savvy money management and a great way to empower your kids to take charge of their financial future,” she said.
Consistency is Key
Creating a financially savvy family is all about consistency. Taylor advises to plan monthly family meetings to discuss and set financial goals together.
Parents should teach their kids to set weekly, monthly and yearly financial markers to track success. Daily, parents can encourage their kids to do personal check-ins to stay aligned with financial goals. Weekly, parents and kids can check on their financial progress and make necessary adjustments to keep everyone on track. Yearly, parents can plan a family financial retreat to plan annual goals as a family and look ahead to the future.