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Teach Your Kids the Value of Investing Early

By Kyrk Davis

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I work with many young professionals and growing families here at Family Financial Partners, as well as more established professionals. One thing so many young folks have in common is a lack of understanding the concept of investments. And those clients who are a little further along in their careers? Well, most of them tell us they wish they'd been shown the importance of investing - in a tangible way - much sooner.

Now, I'm not saying I think everyone should come out of high school or college a budding financial planner if that's not their chosen career path. But having a basic idea of the benefits and principles of investing would motivate so many folks to save and invest instead of putting it off, which is one of the biggest mistakes we see new graduates and young professionals make - they don't fully grasp the importance of starting early. So, they don't.

The other problem we run into is that schools and universities don't teach those kinds of skills on a personal level, and many parents are hesitant to discuss the family finances with their children. I get that. I do.

So, how can parents best teach the next generation the importance of saving and investing? One thing I suggest to my client families who have young children is to set up a 529 college savings account, and involve those kids in the process of growing that account. Now I know, you may be thinking that your children's eyes would glaze over the second you bring up this conversation, but be patient, and persistent. Educate your kids about what the 529 is, how it's invested, and what the goals are. As kids get older and really start to understand that that money will one day benefit them, trust me, they'll start to pay attention to the balance.

Then, come graduation and it's time to go off to college, they'll understand how satisfying it is to reap the benefits of that investment. Four years later, when they get that college degree, hopefully they'll be ahead of the game when they start to build their own nest egg and work toward their own goals.

I recently helped set up a 529 for my 4-month-old nephew, and I can't wait to show him how that account could help him in the future. What questions do you have when it comes to talking to your kids about money? Give us a call. We're always here to help.

I work with many young professionals and growing families here at Family Financial Partners, as well as more established professionals. One thing so many young folks have in common is a lack of understanding the concept of investments. And those clients who are a little further along in their careers? Well, most of them tell us they wish they'd been shown the importance of investing - in a tangible way - much sooner.

Now, I'm not saying I think everyone should come out of high school or college a budding financial planner if that's not their chosen career path. But having a basic idea of the benefits and principles of investing would motivate so many folks to save and invest instead of putting it off, which is one of the biggest mistakes we see new graduates and young professionals make - they don't fully grasp the importance of starting early. So, they don't.

The other problem we run into is that schools and universities don't teach those kinds of skills on a personal level, and many parents are hesitant to discuss the family finances with their children. I get that. I do.

So, how can parents best teach the next generation the importance of saving and investing? One thing I suggest to my client families who have young children is to set up a 529 college savings account, and involve those kids in the process of growing that account. Now I know, you may be thinking that your children's eyes would glaze over the second you bring up this conversation, but be patient, and persistent. Educate your kids about what the 529 is, how it's invested, and what the goals are. As kids get older and really start to understand that that money will one day benefit them, trust me, they'll start to pay attention to the balance.

Then, come graduation and it's time to go off to college, they'll understand how satisfying it is to reap the benefits of that investment. Four years later, when they get that college degree, hopefully they'll be ahead of the game when they start to build their own nest egg and work toward their own goals.

I recently helped set up a 529 for my 4-month-old nephew, and I can't wait to show him how that account could help him in the future. What questions do you have when it comes to talking to your kids about money? Give us a call. We're always here to help.

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