Kid earning money for future


Family Communication, Resources, and Income in Adolescence and Financial Behaviors in Young Adulthood

Quick Summary: Researchers Szendrey and Fiala at Walsh University looked at the relationship between family communication and resources related to financial management behaviors of young adults ages 18 to 34. They found that parents act as the ideal first financial coach in their children’s lives as they grow, and that higher levels of communications about finances led to increased financial knowledge and better financial management behaviors overall.

Three Key Insights:

  • The more you communicate to your children about proper consumer skills, the better their later life financial behaviors become, regardless of the socioeconomic level of the family.
  • Parents should be aware that they are direct influences on the financial behaviors of their children, regardless of underlying circumstances.
  • Financial counselors, coaches, and advisors need to learn more about a client’s financial background during the intervention stages of a session, to really understand the root of the issue.

My Aha Moment: As a mom of two young children, recognizing how important financial management conversations are at a young age is key for my children’s financial behaviors later in life. Reflecting on my own childhood, my father’s income was kept as a secret and I was handed a lot of luxury in my life. While I want to provide my children with all they need, having all they want is a point of contention, especially with my oldest. He doesn’t really understand why we can’t get the backpack with all the bells and whistles.

I realized with back to school season, this may be the perfect opportunity to once a week discuss money during homework or even dinnertime. Every childhood is different and being mindful of spending patterns and behaviors in front of your children is important. You should consider explaining the “why” of “we can’t buy that toy right now.” Children may model financial behaviors from their parents, so keeping in mind your own purchases, what our children infer from those purchases, and how can we use teachable moments to help them learn about financial concepts.

As parents, we are their first teachers. By communicating during these moments when our kids are getting back into the swing of school, we can help create a safe space to discuss personal finance education.

How would you start the dialogue with a client about their past family communication with money?
How would you talk to a client about how they communicate with their children about money?
What tools or questions would you use?

One of my favorite places to start is the Consumer Financial Protection Bureau’s – Money as You Grow book series for children of all ages. The CFPB has excellent resources for all ages. If you’re struggling with conversations about money with your children, using their parent guides and book resources can help get that conversation started.

Guest Contributor: Sasha Grabenstetter, AFC®, Financial Planning Education Consultant, eMoney Advisors

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