Sound Financial Planning for All the Family Members

“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

What is Your Child's Cognitive Money Stage?

“Children are not little adults,” explained the late Jean Piaget, the developmental biologist who studied intellectual development in children. “Until they reach the age of 15 or so, they are not capable of reasoning as an adult.”

Children move through four stages, Piaget taught, and in each, there are a specific set of criteria that must be met and mastered. The most advanced stage of the four is the Formal Operational stage, which children reach between the ages of 11 and 15, and in which they continue throughout adulthood.

Here at Worley Erhart-Graves Financial Advisors, we were very interested in a study published by the National Financial Educators’ Council. This study examines the topic of teaching financial literacy to children, based on their cognitive ability. The NFEC asserts “starting in high school, most students possess the cognitive abilities and math skills needed for the majority of financial literacy lessons.”

Children today have more power to spend money than any generation before, says Madison DuPaix, the “Kids and Money Expert”. And that, our clients share with us, is the crux of the issue. What are the best ways to teach our children about the importance of saving and spending wisely?

DuPaix recommends a few books you might want to check out: 

This month of April is National Financial Literacy Month, and, as active members of the Financial Planning Association, we’re involved with providing support, tools, and education for the public. In fact, we feel as if this blog about financial planning is a big part of how we can make a difference for our readers. 

Yes, at Worley Erhart-Graves, we’re interested in sharing good financial practices that “children” of all ages can use!

Content was prepared by a freelance journalist on behalf of Worley Erhart-Graves Financial Advisors