SOURCE: Certified Financial Planner Board of Standards

CFP Board

December 04, 2009 11:17 ET

Talk to Your Kids About Money: Home Is Where the Important Lessons of Personal Finance Are Learned

The New Financial Realities: Personal Statement by Eleanor Blayney, CFP® Consumer Advocate for the Certified Financial Planner Board of Standards (CFP Board):

WASHINGTON, DC--(Marketwire - December 4, 2009) - The latest economic crisis has taught us a lot about financial irresponsibility. While we may differ as to who and what was primarily at fault, we are united in the hope that future generations never again have to incur the devastating costs of such irresponsibility. With new urgency, we are now aware that we cannot ignore our duty to teach our children about money and financial responsibility. Today, there are new financial realities; we must re-examine some basic assumptions and consider some new approaches. Over the course of this series, we are looking at nine important financial strategies. This week: Talking to your kids about finances.

We don't talk enough about finances to our children, and if ever there was a time to start that conversation, it's now. Parents need to realize that the first and most important financial education takes place at home, whether undertaken consciously or not. According to a 2008 Junior Achievement survey 54% of children aged 12 to 17 cited their parents as their primary role models. Their friends came in a distant second at 13%.

In other words, your kids are watching you closely. They are learning from you about saving and spending, budgeting and dealing with debt, about reacting to declining asset values and even about handling job loss.

Tomorrow's financial attitudes and practices begin today at home. Here are a few suggestions on how you can help your kids understand the importance of "safe" and responsible finance.

--  Start talking honestly and regularly about money.  Bring the topic out
    in the open and to the dinner table.  Too often, we avoid the subject as
    inappropriate, uninteresting, or too complicated for kids.
--  Share with  your kids  the financial decisions you are making, the
    hard choices you may be facing, and tell them what you are doing about your
    job, your bills, your savings.
--  Impress on your children that money entails choices and trade-offs.
    Kids think unilaterally, which usually means they see money as having one
    purpose: namely, spending.  Help them understand that it can be used for
    saving and giving as well, and encourage them to allocate the money they
    receive into these different uses.
--  To raise a financially literate child, become a financially literate
    adult.
    

As the Consumer Advocate for CFP Board, I want to encourage you to learn from the lessons of the recent financial crisis, and to share these lessons with your children. Equip them to face their financial futures with confidence, capability, and appreciation for the examples set by their parents.

To view the new financial realities series, please visit http://www.cfp.net/learn/advocate.asp

Eleanor on Twitter: http://twitter.com/EleanorBlayney

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Eleanor on LifeTuner: http://www.lifetuner.org/users/eleanorblayney

About CFP Board:

The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for personal financial planning. The Board of Directors, in furthering CFP Board's mission, acts on behalf of the public, CFP® certificants and other stakeholders. CFP Board owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™ and federally registered CFP (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements. CFP Board currently authorizes more than 60,000 individuals to use these marks in the United States. For more about CFP Board, visit www.CFP.net.

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