Personal finances

5 Reasons I Refuse to Die Before Teaching My Grandchildren About Money – The Motley Fool

Summary

I’m wiser today than I was when I was raising my sons, and that’s a shame. I look back on how much energy I put into focusing on silly things when my boys were growing up and wonder how different things might have been if I’d focused a little more on teaching them about personal finance.

These guys went away to college with very little financial know-how. They didn’t have a checking account (Mom and Dad footed the bill for everything), didn’…….

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I’m wiser today than I was when I was raising my sons, and that’s a shame. I look back on how much energy I put into focusing on silly things when my boys were growing up and wonder how different things might have been if I’d focused a little more on teaching them about personal finance.

These guys went away to college with very little financial know-how. They didn’t have a checking account (Mom and Dad footed the bill for everything), didn’t understand how compound interest could either make them rich or poor and had no idea how to get started investing. Fortunately, things worked out, and they’re both great with personal finance, but it could have easily gone south.

Today, we have three young granddaughters, and I am determined to teach them everything they need to know about making money work for them before I die. There are at least five reasons for this.

1. Protection

I’ll be honest here. I’m not sure how important this would be to me if it weren’t for what I’ve learned over the years about financial abuse. According to The National Network to End Domestic Violence, financial abuse occurs in 99% of domestic violence cases. I would not care if I had granddaughters or grandsons; there is no way on Earth I’m sending the next generation of our family out into the world without the solid armor of knowledge.

The girls were still in diapers when I began talking to them about the importance of making their own money. I’d slip it in on walks to the park or games of Monopoly Jr. I’d talk to them about finding a career they love and creating their own financial nest, totally separate from anyone else’s financial nest. She can do anything she wants, but she must always be able to stand on her own. We can help protect children by teaching them to be financially independent.

2. Demystify finances

The truth is, the earlier we start talking to children about finances, the less intimidating it seems. It’s like learning to play a musical instrument or speak a foreign language. The earlier we start, the easier it is to absorb. My husband and I send them an allowance each week, and they understand that some of it is for spending and a portion is for saving.

The 8-year-old has been investing in Schwab Stock Slices for a couple of years, choosing her own stocks from the S&P 500 list, and watching how her portfolio performs. She’s learning about compound interest, risk, and the importance of investing for the long term via real-world investing. By the time she’s an adult, this will be old hat, a familiar way to handle money. And it all began with buying tiny slices of stocks of …….

Source: https://www.fool.com/the-ascent/personal-finance/articles/5-reasons-i-refuse-to-die-before-teaching-my-grandchildren-about-money/