Taylor is concerned that many young parents are missing these conversations with their children, missing out on some basic lessons they need for long-term financial health. She asked the counselors to initiate discussions with the parents just as they did and to encourage them to participate in this training.
She said parents can start these conversations with children as young as three if they set up a piggy bank for them. You can ask children to help out at the flea market so they can learn about the different coin values. You can teach your children to compare and determine value when shopping. The family can buy a few stocks – for Disney or skateboards, for example – and watch and discuss why they go up or down. Parents can also talk about budgeting and differentiating needs and stocks when teens get their first job and go to high school.
It makes a difference. Taylor remembered a millennial who just became her client. The young woman was only 14 years old when she listened to her advisor at her parents’ dining table. “She said, ‘I thought I didn’t understand anything. But now I hear things that are getting more resonance because of that early exposure, ‘”Taylor said.
Taylor shared several tips that consultants can share with clients to help them with these conversations.
First, parents should lead by example by engaging a financial advisor and developing a financial plan that they can then share with their children. She encourages parents to have an annual financial meeting with their children and to ask them for their age-appropriate opinion on how the family plans financially, for example for family vacations. As their children get older, parents can also discuss how they accumulated their money and what they want to achieve with it, and then ask the children how they are doing. Such discussions can also open the conversation when families have to make decisions about elderly care and inheritance later in life.