The Must-Have Gift for Your Daughter This Holiday: Financial Literacy

December 14, 2009 by Administrator
Filed under Family Time

By: Lisa Caputo and Linda Descano of Women & Co.

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The holidays can be an opportune time to instill financial values in children and grandchildren. Wish lists and gift shopping can help them distinguish between needs and wants. Donations and volunteering introduces them to the concept of giving. Mothers are often leading the charge when it comes to promoting financial education in the family. In fact, a Women & Co. study conducted in 2008 found that 92% of women consider themselves a positive financial role model to their children.

Try these tips to teach your daughter about financial responsibility, sharing, and the connection between money and values.

Tips to help your daughter be financially savvy:

1. Be a positive role model. Children absorb values by observing adult behavior. Set an example for your daughter, and model a healthy attitude toward work, earning, spending, and giving. Keep the role of money in perspective in the family and don’t use it as a means of comparing yourself to others.

2. Understand her environment. Try to unearth the experiences your daughter is having with money among her peer group. Values, attitudes and beliefs are continuously evolving so it’s important to help your daughter interpret what she may be hearing, seeing, and feeling.

3. Establish good behavior. As soon as your daughter is ready, set up an age-appropriate allowance for her and a schedule for dispensing it between savings, spending, and giving. For teens and college students, consider giving an allowance to last over several months and let them have a chance to allocate it over time.

4. Talk about money. Talk openly about money in the family. Do not treat money as a topic that is taboo. A candid, honest and ongoing dialogue about money in the household can help children develop healthy attitudes and learn valuable lessons.

5. Make it fun. Talking about money doesn’t have to feel formal or dull. Window shopping and trips to the library can teach important lessons about needs vs. wants and borrowing. Many classic board games like Monopoly, Life and Payday are springboards for basic lessons in finance.

6. Do it together. Create a “family fund.” Saving toward a common goal, such as a vacation or donation to a charity, offers children the opportunity to get involved with conducting research, creating the budget, and more. Grandparents and relatives can be invited to join the fund too.

7. Give back to the community. Help your daughter determine how she would like to contribute her time by showing her options. Perhaps someone in your family is musically talented and can arrange a performance for people at a local hospital. Or utilize the skills of the entire family by serving at a soup kitchen or helping to build a home for a family in need.

8. Be fair. While you may not be able to be completely consistent between children because of differences in ages, do make every effort to avoid comparing siblings or creating monetary competition in the household.

9. Accept mistakes and celebrate success. Protecting your daughter completely can lead to financial problems when she is an adult so allow her to make mistakes. But do set limits and make rules. Equally important is to celebrate their successes.

10. Be patient. The results of your efforts may not be apparent until much later on in your children’s lives. Trust that you’re doing the best you can and take the setbacks in stride.

ABOUT THE AUTHORS:

Lisa Caputo is the Founder, Chairman and CEO of Women & Co., and Linda Descano, CFAR, is President and COO of Women & Co. For more about teaching children about money, visit womenandco.com, a vibrant destination for financial education, insight and community with a suite of resources that help women create smart financial strategies.