Financial literacy is something that I’m working hard to teach my children early on in life. We are starting with the simple aspect of earning money for simple chores, learning to save our money and to spend wisely. Little do my children know, they are not only learning about how to save money, they are making a contribution to something so much bigger in their life.
With a recent change in careers, I’m now working as a stay at home mom. Because I no longer have a 401K from an employer, there are other decisions that have to be made in order to prepare my husband and I for retirement.
I found this article about saving for college and retirement, and learned about ways to involve your children in the college planning process. My husband and I have been working hard to put aside for our children’s college and realized that we might be setting ourselves short for retirement in the process.
We are using some of the retirement tools from Genworth Financial to make the right decisions for our retirement and in the process we are learning how to teach our children to get a good start early in life.
My five year old earns an allowance for doing small things around the house that are expected of him, such as putting dirty clothes away, brushing his teeth without being asked, picking up at the end of the day and so on. A savings account has been established for him and we make him put away 20% of his earnings into the account. As he gets older we will explain to him how his savings will be used to help with his college expenses. While my husband and I do plan to help our children financially with college, teaching him how to save early is a good first step in making better financial decisions in the future.
Saving for your child’s college and your own retirement is a hard battle. You don’t want to put all of your eggs into your child’s college savings, this can only backfire and set yourself short for retirement. But you don’t want to send your child off with $40k+ in school loans.
I think a good balance can come between the two and getting your children involved in the savings process is not only a good learning experience for them, it will set them up for a more successful financial future.
How do you teach your children about financial literacy?
*Disclosure – This post was inspired by Genworth Financial