The last several weeks we have been busy meeting with our client’s children. We recommend what we call “kid meetings” at a few critical stages:
- Just prior to getting their driver’s license.
- Just prior to going off to college.
- After graduation from college.
We usually hit four areas within the one-hour visit.
- Money management and budgeting.
- Saving strategies.
- How and when to start investing.
- The magic of Time Value of Money.
Every kid is different, but there are two things I have learned about our kids through these meetings:
- They know to avoid debt but do not know how. Nearly all of the kids who come see me have learned from their parents the importance of avoiding student loans and credit cards, but few are implementing sound habits, strategies, and goals that will keep debt at bay. We talk about how much things cost, what costs will be associated with their aspirations, and the importance of having adequate savings. We usually spend more time talking about how to save money in a savings account than anything else because I believe it’s the most important habit they need to develop.
- When I explain the magic of Time Value of Money, they are deeply influenced. I explain Time Value of Money in a simple way by breaking down their young lives into doubling periods and showing the impact the number of doubling periods has on their balance of funds available at a later age. They get it completely and to the point where it becomes a driving motivator in their decisions to contribute heavily towards their retirement plans.
Our own personal financial success can be a great example for our children to follow, but none of us were born with the sound habits and knowledge that got us here; we had to pick it up along the way. Our kids sometimes get an unclear picture because they see the results of years of effort but not the process.
Hopefully our meetings help provide a framework of knowledge and tools for getting our kids down the road a little easier. Are you interested in having someone visit with your kids about personal financial matters? If so, let me know and I’ll try to help!