When we think about what children need to learn at a young age, usually the basics come to mind first - reading, writing and arithmetic for starters. However, there should be great importance placed on teaching financial literacy and intelligence at an early age, too. After all, many money habits are already set by age seven. By forming and practicing healthy money habits early on, you can prepare children for a lifetime of financial well-being.
Despite the value of teaching children about finances, these lessons in money management do not start and end in childhood. There are a number of financial milestones that everyone should strive to reach at certain times in their lives to guarantee financial health. With this guide, parents can teach their children good financial habits and plan for their own future at the same time. We will explore key financial milestones at various life stages to help every member of your family work towards good money management skills.
This is a momentous time for a young person. They move from being fully dependent on mom and dad for everything to doing some things independently. However, at this age, the great majority of children still live at home and rely on their parents for all the necessities of life. Around this time, children begin to understand how money works. They may start earning an allowance and understanding the concept of working to earn money. Most children will also begin to notice the costs of different items, while also being exposed to advertising.
Teenagers in this age bracket are experiencing new and exciting life changes - they are getting their first job, researching and applying for college, beginning to date and starting to imagine what the future will hold. Needless to say, there are many financial milestones to achieve at this age.
This is another monumental age, as the transition to adulthood has begun. Some young adults will go to college and, thus, acquire student debt. Others are entering the workforce and starting their career.
Today, younger generations are delaying marriage and home ownership until their 30s. For many, this stage is a time for establishing stability, and starting a family, buying a home and planning for the future become top priorities. Despite your goals and preferences, the 30s are a good time to establish financial stability.
In your 40s, you are most likely trying to “do it all.” You may be helping to care for your own parents as they age yet still raising your children and preparing to pay for their college. You also need to prepare for retirement, yet may still need to eliminate debt to boost your savings.
In your 50s, you’re likely looking forward to retirement. Perhaps you’re wanting to downsize by moving to a smaller home or getting rid of unnecessary items. You’re also enjoying years of hard work and protecting the assets you have acquired.
During this time, you are most likely transitioning into retirement, protecting your nest egg and possibly relocating.
Once you’re in your 70s, you should be enjoying retirement years. Required Minimum Distributions begin and it is also time to consider what your legacy will be.
In conclusion, there is always a need to educate children regarding finances, but education never ends. Partnering with a wealth management company like Caldwell Trust can help guide you throughout each milestone and ensure you make the right financial decisions both today and in the future.