• Fri. Dec 8th, 2023

Teaching kids the ABCs of money: the expert advisor inspiring financial literacy at home

Photo courtesy Noble Financial Group

Opinions expressed by Digital Journal contributors are their own.

Money management is a vital life skill often overlooked in traditional education. While children learn subjects like math and history, personal finance is left out of the curriculum. However, certain experts argue that it is crucial to introduce financial literacy to children from an early age.

Financial literacy lays the groundwork for understanding the value of money, making informed decisions, and building a secure financial future. According to Certified Financial Planner Lucas Noble, equipping children with the basic knowledge of money management fosters independence and empowers children to make informed decisions as they become adults. It demystifies the concept of money, making it a more manageable part of life.

So, where should parents start when teaching their children about money? Noble says it begins with the concept of earning. Assigning age-appropriate chores and tasks allows children to understand the relationship between effort and monetary compensation.

“My wife and I don’t give our children money; they must earn it. They clean cars, shovel snow, do lemonade stands, babysit, or whatever else they can to make money,” Noble shares. “By earning their own money, they learn the value of hard work and the following rewards.”

Next comes the idea of wealth accumulation. Introducing children to setting aside money for future needs is invaluable. For instance, parents can encourage their children to save by providing a piggy bank or a savings jar.

Interestingly though, Noble approaches savings education somewhat differently by educating his children about investments in a way they can best understand. “I give my kids  20 cents for every dollar they earn,” he explains. “So if they invest $100, I’ll put in $20 to it, and they’ve got $120, and so on.”

Noble also believes learning about the stock market is crucial for the youngest generations. As someone who took a keen interest in stocks when he was just a boy, Noble has broken down the stock market concepts for his children in hopes of igniting a fire of interest in them.

“Right now, my kids think what I do for a living is boring. They’ll come and tell me that all I do is talk on the phone,” Noble shares, with humor in his voice. “But, I always tell them it’s much more than that. Finance is a psychological game, so that’s why I want them to learn the basics.” 

To teach his children about stocks, Noble brought the market down to their level. Whether it’s a game they play or Nike shoes, Noble encourages his children to research the stocks they are interested in. Leaning on the knowledge he had already imparted, the children try to choose the best stocks and see if a purchase is worthwhile.

Whether parents choose a savings jar or take financial literacy a step further, like Noble, and introduce more complex market concepts, children are bound to develop a sense of delayed gratification, and they will grasp the importance of patience and long-term planning.

In addition to earning and saving, teaching kids about responsible spending prepares them for real-world challenges. Children develop critical thinking skills by discussing needs versus wants, comparing prices, and understanding the value of making informed purchasing decisions. “This gives them an upper hand later in life when navigating student loans or the dynamic economic landscape.”

Noble’s mission of teaching financial literacy to kids extends beyond immediate benefits.  He envisions a future where these knowledgeable youngsters grow into high-net-worth clients. This forward-thinking perspective emphasizes that fostering financial knowledge in the younger generation is an investment in their future and a strategic move for the financial industry.

“In the long run, a financially literate population is the backbone of a thriving and robust economy. These kids will be capable of managing their finances and driving economic growth.”

This way, Lucas’ practice of instilling financial literacy at home is not just a lesson for his kids and everyone looking to achieve financial stability but a blueprint for the future of the financial planning industry.

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