Building towards retirement, you have made many financial decisions. Perhaps you maxed out your credit card on clothes in your early 20s or chose the wrong payment plan for your car loan or home mortgage. Regardless, you’ve navigated many financial obstacles and gained wisdom that can now be passed on to your kids and grandchildren. Although money can be a difficult topic to discuss, sharing this wisdom can help future generations make better-informed financial decisions. These are some topics to raise with different ages.

Advice for Ages 5-13

At this age, most children have not had much interaction with money, and the concept of money management may be foreign. If your kids or grandkids around this age are getting an allowance, small payments for helping around the house, or money on their birthdays, then it might be a good time to teach them about saving. It’s important that they still have the authority to spend their money how they wish, but teaching them how to save (and perhaps helping them open a savings account) could be a great first step in prudent financial practices.

Financial Knowledge for Ages 14-17

This is a time when teenagers get ready for college. They’re figuring out who they are and often start to pick up specific interests that they want to invest in, such as makeup, video games, or a stylish sneaker collection. It is essential for them to realize the real cost of both their interests and the life their parents have afforded them. This could include tuition, books, their side interests, and how specific decisions – like taking out student loans – affect their future. Although parents have been a safety net their whole life, this life stage brings up important lessons on spending, credit, and saving. Guide them on topics like credit scores, filling out a FAFSA form, and opening a savings account.

Age 18-22 is the Time of Financial Independence

Being away from home for the first time and getting carried away by different activities, college life can get very expensive. The most important topics at this stage may be budgeting and investing. Just as you are investing in their future by helping with their education, they may start to understand the value of investing in their financial security. Talk to your kids or grandkids about the value of retirement savings and the best ways to be disciplined about it. This is also a good opportunity to start bringing up investing in a Roth IRA and interest earned on savings accounts. As they approach graduation, they may also start to think about moving, beginning to pay off student debt, and taking out car loans. Guide them through important factors to consider, such as buying a used car versus a new one, budgeting while paying off debt, moving costs, and generally, how to live alone for the first time.

As kids grow older, the concept of money can become daunting if they don’t receive enough guidance. Talking to your kids or grandkids about money from an early age can empower them to take charge of their finances in their adult life. Click HERE to sign up for a complimentary review with us at Zinnia Wealth Management to learn how you can take better care of your own finances and thus set an example for the next generation.