Every hour of every day, parents are “teaching” their children about finances, among many other things, with their own behavior. That’s what Stephanie Mackara, President & Principal Wealth Advisor of Charleston Investment Advisors and author of the new book “Money Minded Families”, points out in a press release.
In her view, if you make a habit of spending unconsciously or irresponsibly, you run the risk not only of creating your own negative financial situation, “but also of passing your financially unhealthy behavior onto your children”. To teach kids healthy spending and saving habits that will prepare them for life, Mackara recommends practicing 4 financial principles:
1. Saving = freedom
“Many people opt out of saving when given the choice, either because they just don’t think they can afford to, or they don’t have a clear understanding of how savings will provide them with choice and freedom,” Mackara says. The solution for her is to think of it not as saving, but as purchasing freedom.
2. Model the behavior you want your kids to learn
“Every day brings opportunity to show children and young adults about the simple process of spending, saving, and investing, and also to demonstrate the values that guide your choices”. Mackara recommends to live in a place where you spend and save thoughtfully, where your behaviors and thinking about your finances contribute to your personal well-being, and “where anything is possible”.
3. Don’t rely on government or corporations to dictate what your retirement will look like
In her view, the financial foundation of the United States is no longer stable and the only way to fix it for the future generations is to “take charge and DIY (do it yourself)”.
4. Financial literacy is no longer optional
“We must shift our thinking from allowing our children to take minimal personal responsibility and acquire limited financial knowledge, to consciously increasing the level of education they receive relative to financial matters”. Mackara points out that the next few generations don’t have the luxury of waiting until age 50 or 60 to pay attention to their financial wellness and money management habits.
All in all, she thinks American citizens must become more conscious of their financial journey before, during, and after retirement. “We must work toward living a life of financial mindfulness and wellbeing in order to better enjoy our present lives as well as our future retirements”, she concludes.