As Americans continue to adopt a new frugality in their financial lives, many military families want to pass along these same values to their children.
In an effort to help parents teach kids financial responsibility, we surveyed financial advisors to learn what advice they think is most important for fostering financial responsibility in their own children.
Here's what we learned:
- 27 percent of advisors said they would tell parents to be a better financial role model for kids
- 19 percent would advise that parents start teaching children about finances at an early age
- 15 percent say children should take some responsibility for managing their own finances
- 12 percent would discuss financial issues openly and honestly with your children
Teaching children to establish and stick to a budget is also paramount. At least 72 percent of survey respondents think that spending without a budget is the greatest financial mistake made by teenagers today.As a result, 41 percent of advisors talk to their children about spending on a budget at least monthly, with 11 percent talking about this issue at least a few times a week.
Also, survey respondents say that parents who want to foster financial responsibility in their children should de-bunk several potentially destructive financial myths.
- "I need to make more money before I can start saving."
- "I'm too broke to invest."
- "I shouldn't deprive myself now by locking my money for decades in retirement savings."
One recurring theme in these responses is the importance of having an honest and open dialogue with children. Seven out of 10 advisors use their own personal financial mistakes -- and mistakes made by others -- to educate their children.
Due to the coaching nature of their job, these financial professionals are attuned to the teaching moments that arise from real-life experiences, such as this current period of economic turmoil.
As both a Certified Financial Planner professional and a parent, I find that being honest about your own financial experiences is a great way to help your children deal with some of the anxiety they may be feeling in today's uncertain economy and prepare them for a financially responsible tomorrow.