Setting the foundation for a lifetime of fiscal responsibility

While parenting styles and methods may differ, most parents share a common goal: to raise children
to be healthy, happy, and independent adults. Preparing children for financial independence by instilling healthy
habits and attitudes about money can go a long way toward achieving these goals.

Fortunately, you don’t need special training or a degree to equip them with the right tools.
Teaching kids about the value of money starts at home with the behaviors you model every day, from the importance
you place on budgeting and keeping spending in check, to what you choose to splurge on, and your family’s values
around charitable giving and multigenerational wealth. To get started preparing your children for financial
independence, consider the four tips below.

1. Begin teaching them when they’re young

The earlier children learn about the important role money plays in life, the more likely they will
develop a positive relationship with it. Even very young children can master three basic principles: saving, giving,
and spending.

To help them understand these principles, consider the “bucket” method when preparing children for
financial independence. Set up three containers. When young children receive money for completing chores or from
grandparents, allow them to make decisions about how much they will save, give to others, and spend on themselves.
You can reward behaviors you want to foster by adding a small matching contribution to that bucket. This method of
preparing children for financial independence is something kids can easily carry forward as they grow and begin
earning money of their own as teenagers and young adults.

2. Don’t be afraid to talk about money

An effective way to begin preparing children for financial independence is by sharing your own
experiences with money. For example, explain how saving money helped you buy a car, pay for college, purchase a
home, or plan a recent family vacation. Talk about your values around spending and debt, why you choose to
contribute money to certain causes or charitable organizations, and your thoughts about preserving wealth for future
generations. The more you communicate, the greater the opportunity to prepare children for financial independence
while instilling important family values about wealth.

3. Encourage participation in family finances

Consider including kids in family discussions about budgeting and spending, as appropriate, to
help them understand that everyone has a role to play in keeping household finances on track. Encourage them to ask
questions and share their thoughts and ideas. Participation in family finances can help prepare children for
financial independence while developing greater respect for how money is earned and used within your household. It
can also provide valuable lessons about saving, goal setting, and trade-offs.

As kids approach adulthood, their financial education may expand to include participation in
family legacy and charitable planning decisions. Consider ways they can participate in decision-making if your
family operates a charitable foundation or trust, or uses Donor-Advised Funds to make charitable contributions.

4. Embrace technology

Preparing children for financial independence doesn’t have to be all work and no play. Thanks to a
broad range of age-appropriate technology tools, such as websites and mobile apps, children of all age groups can
improve their financial literacy through interactive games and tutorials that teach important skills, such as
saving, budgeting, and even investing basics. This can be a fun and informative way to get started preparing
children for financial independence and set the stage for fiscal responsibility in adulthood.

For more information about preparing children for financial independence and ways to help preserve
family wealth through multigenerational planning, listen to my latest podcast episode at Frank Wealth Insights. To
learn how we can help you and your family pursue the Return on Life® you desire, contact us today for a free
consultation.

About Return on Life Wealth Partners

Return on Life Wealth Partners is an independent Registered Investment Advisor (RIA) founded in
1994, with headquarters in Cleveland. The team provides comprehensive wealth planning services to individuals,
families, and business owners. By examining clients’ lives before their money, Return on Life® aligns its advice
with clients’ values to help achieve the milestones that matter most to them. This personalized approach also
extends to the institutional and corporate retirement plan services available through 401(k) Prosperity®.

Investment advice offered through Planned Financial Services, LLC, a Registered Investment
Advisor. Copyright © 2024 Planned Financial Services. All Rights Reserved.