It can be hard to teach your kids about finances when you feel like you don't have it completely figured out yourself. Don't worry, though—you don't have to have all the answers. Rather, focus on being a money mentor. Practice good financial habits and provide a lasting example of saving, budgeting, and open financial communication.
We know there is a lot to juggle when it comes to parenting and finances. As a start, we came up with 4 quick tips that we think every parent should know.
1. Lead by example
Kids are always watching and learning from you, so make sure you're being a good money role model in the day-to-day experiences—like by minding your spending, following a budget, prioritizing saving, and being cautious with debt. Simple lessons like teaching your kids the difference between spending on wants and needs can go a long way. Really, anything that involves money can be used as a learning tool to teach financial literacy for kids.
For 6 tips on how to be a good money role model, read more Viewpoints at Fidelity.com: Be a great money role model.
2. Have open conversations about money
You don't need to share the entirety of your financial situation with your kids, but talking openly about finances can help demystify money for them and help promote healthy financial habits. Consider sharing a financial goal of yours with them, talking about money decisions you've made that you're proud of, or giving them a "budget" when they want something new. These could all be effective ways to teach your kids the value of money and the importance of managing it.
To learn more about talking to your kids about money, read Viewpoints at Fidelity.com: 5 ways to teach your kids about money.
3. Save for their higher education
Remember that higher education, such as college or trade school, can be incredibly expensive and seems to come quicker than we think it will. It's never too early or too late to start saving.
A 529 savings plan is an option that can help you do this. If you can, try to make small monthly contributions, or even automate your contributions. Another idea is to ask relatives to make contributions toward your kids' education plan instead of giving toys at holidays or birthdays. Or if your kids decide to work before college, you could also offer them some sort of matching program. For example, for every 50 cents they contribute, you will match with a dollar.
To learn more about how 529 plans can help you plan smarter, read Viewpoints at Fidelity.com: The ABCs of 529 savings plans.
4. Don't put yourself last
Think about your finances with an "oxygen mask" mentality—protect yourself first. Make sure your retirement accounts are on track before you start funding anyone else's education. Your kids can take on loans for college if they need to, but you can't take a loan for retirement. And if you haven't saved enough for retirement, your kids might end up becoming financially responsible for you. So remember that saving for your retirement is for you and for them.