By Patricia Roberts, Managing Director
July 21, 2014
The welcomed and relaxed pace of summer provides a unique opportunity for us to catch our breath and address issues (big and small) that have been pushed to the side during the hustle and bustle of the school year. Even more importantly, with a bit less on our collective plates, the summer season also presents the opportunity to connect in meaningful ways with our families and particularly, with the children in our lives.
With formal learning in the rear-view mirror for a while, opportunities abound for school age children to explore and learn outside the classroom, in more relaxed circumstances. When we think about the experiences we’d like to have with the children in our lives this summer, it’s also good to think about the knowledge we’d like to impart.
Consider results of a recent international survey regarding teen financial literacy that caught my eye. It revealed that American teens fall below approximately half of their peers in other developed economies when it comes to financial literacy.
What can we do to help improve the financial capabilities of our children?
As loving parents, we thoughtfully teach our children about health, personal safety and various forms of self-care. We often, however, unwittingly miss precious opportunities to explore a topic that can be of tremendous value to our children as they grow. Savvy as they may seem, our children sometimes grow up lacking the information they need to be safe, healthy and confident … financially. We teach them about healthy relationships with others but considerably less often, about healthy relationships with money. And we know that when it comes to this topic, what children do or don’t learn can make a difference.
What might we consider doing during the remainder of this season to open the door to age-appropriate discussions about financial matters?
Plan it Out -If planning an end of summer vacation, for example, take time to establish a budget and compare costs as a family. Consider whether it makes more sense to drive, fly, or take a bus or train to your destination. If staying closer to home, watch for summer discounts and/or consider how much has been saved by foregoing a long-distance trip this year.
Teach through your actions. Just as our children watch us apply our own sun block, show moderation in what we consume at summer outings, and buckle our seatbelts before driving, our money habits provide valuable lessons as well. Sensible economic choices made during the travel planning process or while exploring a new place can provide great examples for children to emulate. As we get closer to the new school year, don’t forget to spend time with your children to check the current inventory of school supplies and clothing before rushing out to buy more.
Tie it Together-Our children may benefit greatly from observing the planning and sacrifice that is needed to reach an important goal that is personal to them. Saving for college ties together educational and career goal setting with financial planning. Starting or adding to a 529 college savings account can be a valuable way of showing our children how to approach a significant goal with a significant price tag.
And, when the inevitable summer comes along — when we pack the car to drive our child to the first semester of college — our conversation in the car may just be a little lighter as a result of prior conversations about the value of planning ahead.
About the Author:
Patricia Roberts is a Managing Director at AllianceBernstein where her sole focus is on Rhode Island’s CollegeBoundfund, the nation’s second largest advisor-sold college savings program with over $7.5 billion in assets under management. She has been involved in nearly every aspect of the college savings arena for more than 15 years as an attorney, product manager, state relationship manager, passionate advocate, public speaker and as a mom, saving for her son Benjamin’s education. She is chair of the College Savings Plans Network Corporate Affiliates, co-chair of its Strategic Partnership Committee and plays an active role on other committees including Media Relations, Federal Initiatives and Legal and Regulatory Affairs.