Teaching kids about money is crucial, yet many parents find it challenging to broach the subject. A survey from CNBC and Acorns revealed that while 83% of U.S. adults believe parents should be responsible for this education, a surprising 31% never even talk to their children about finances.
Last week, Northwestern Mutual’s podcast, A Better Way to Money, featured Kat Stickler, founder of Stur Drinks, and Matt Stucky, VP and Chief Portfolio Manager at Northwestern Mutual. Stickler shared her experience of growing up in a household where money was a taboo topic, emphasizing the importance of normalizing conversations about finances.
Stucky emphasized the significance of instilling good money habits early on, such as saving and investing, in children. By starting with simple concepts like saving a dollar for future expenses, parents can lay a strong foundation for financial literacy.
Stickler recalled how her mother taught her the value of money through practical actions like repurposing items, illustrating that financial lessons can be imparted in various ways.
Aside from dialogue, parents can lead by example and make smart financial decisions that set a positive precedent for their children. Planning for uncertainties such as illness or inability to work is crucial, necessitating strategies like setting up wills and funds for healthcare, education, and more.
Stucky recommends leveraging current circumstances to secure a successful future, suggesting options like a 529 for education funds, a Roth IRA for retirement savings, and a Uniform Transfer to Minors Account for financial planning.
Additionally, Stucky highlights the benefits of permanent life insurance for children, stressing the importance of building generational wealth through prudent financial choices.