“Some people may think we’re a bit on the radical side,” say Steve and Annette Economides, authors of the MoneySmart Family System, “but we evaluate what recreational activities our family will participate in with four purposes in mind: the cost, the time involved, the educational benefit, and the physical benefit.” For the most part, they say, an activity needs to meet at least two of those four criteria to earn their approval.
It’s hardly uncommon, here at Worley Erhart-Graves Financial Advisors (WEFA), for a conversation with clients to turn in the direction of parenting decisions that have to do with money. And, as you might imagine, most of us haven’t been as systematic as the Economides when considering recreational activities for our own children.
Still, choosing where to channel discretionary spending has to be very much a part of any family’s financial plan. Even more important, as parents, we want to teach our children financial responsibility and independence. To what extent does that mean allowing children to decide how to spend money they’ve earned or been given as part of their allowance? In the Economides household, when it comes to footing the bill for recreational activities, they as parents cover most of the cost “until our kids turn sixteen and get their first part-time job.”
The Economides aren’t the only ones talking about the way kids form money-related habits. A report by researchers at the University of Cambridge revealed that kid’s money habits are formed by age seven. “Parents are the number one influence on their children’s financial behaviors, so it’s up to us to raise a generation of mindful consumers, investors, savers, and givers,” says Beth Kobliner, a member of the President’s Advisory Council on Financial Capability.
As parents, your goals include preparing your children to handle their own finances responsibly. Meanwhile, our goal as an independent, fee-only financial planning and investment services firm is to help you become financially prepared.
Guiding children financially can be scary at times, to say the least. Here at WEFA, we understand. In fact, we know, planning your own financial future can seem intimidating as well. You might say that comprehensive planning is a process designed to “take the scare out”, helping build a secure financial future for all family members!
Content was prepared by a freelance journalist on behalf of Worley Erhart-Graves Financial Advisors