I’m starting off strong with the title but give yourself a break; this stuff is hard!
My husband is a professional firefighter and his job is to put out fires and rescue cats from trees. Side note: he doesn’t rescue many cats from trees, but the stereotype is strong. One day I was explaining to him the concept of basis isolation and Roth conversions (I promise this blog will not be that technical or use a bunch of jargon, as my husband affectionally calls it). I looked up, and he had a bewildered look on his face with a slight head tilt similar to the one my dog has when I talk to her in that ridiculous high-pitched “dog mom” voice.
Then he starts to talk and says something that I can only summarize “you know it takes 1000 gallons of water a minute through a 2.5-inch hose line…blah blah blah.” I’m sure there were many more words there, and the words I put are wrong, but that’s what I heard.
That’s when it occurred to me, that’s exactly what he heard when I was talking, “blah blah blah.” He is one of the smartest people I know, and it was at that moment I realized he doesn’t really know a lot about my industry. Conversely, I don’t know much about his industry except the basic SWEEP method when using a fire extinguisher and when to call in the professionals when I get in over my head.
When considering topics for a blog series I turned to what many people turn to, social media. I asked my friends to give me topics they were interested in learning more about and, more importantly, would actually read. Financial literacy was the resounding winner. Many comments could be summarized as wanting to learn more about finances for themselves, but they are also very interested in how they can help educate their children on the topic. People want to know more about this area but feel too embarrassed to ask questions that will make them “look dumb.”
As a result, I decided to write a series where each post centers around one area of financial literacy. The topics will include Saving, Budgeting and Spending, Debt Management, Investing, and Credit Health.
Please note these will not be comprehensive reviews of the topics; rather, they will be more high-level tidbits.
While this series is not specifically for kids, I will include a “Kids Corner” that will provide one or two helpful tips for parents.
Age-related financial topics for kids
While every child is different in terms of development, below is a helpful guide for age-related financial topics.
Between ages 3-4: Introduce the concept of money, that it’s a finite resource and can be exchanged for goods and services.
Age 5-6: Teach them how much things cost and the value of money. Have them buy the trinket they want from the store and have them pay with cash.
Age 7-8: Teach them needs vs. wants (heck, we all could use a refresher on this topic). Have them set financial goals.
Age 9-10: Introduce savings vs. spending in the context of delaying gratifications.
Age 11-12: Introduce budgeting and price bargaining.
Age 13-14: It’s time for them to start working around the house for their wants. I don’t mean household responsibilities (aka chores); I mean things above and beyond typical responsibilities.
Age 15-16: It’s time to get a real job, whether that’s working for you or someone else. Also, discuss credit and the benefits/risks of credit cards. Early in this age, you should have a conversation with them about what you plan to contribute to their college costs and what they will be responsible for like covering part of the tuition, spending cash, etc.
Age 17-18: Reiterate your discussion about credit cards and their need to save to cover their expenses for college.
I bet you are an expert in your field of work (if you’re not, that’s a topic for another series) and I probably know very little about it. I hope this series has a few takeaways for you, but I also hope you recognize when to call in a professional. I can assure you that I’m not climbing trees and rescuing cats, not because I don’t like cats and want to help, but because I would likely fall out of the tree and break something. I have no shame in throwing in the towel and asking for help and you shouldn’t either.
Please feel free to reach out if you have any questions and stay tuned for Part 2 of this series on “Saving Money.”