Financial Focus: Lessons about money are priceless gifts to children (column)
Father’s Day is almost upon us. If you’re a dad, then you certainly may enjoy getting cards and gifts, of course. But, over time, you will gain even greater satisfaction by what you can give your children — such as some valuable financial lessons.
These lessons can include the following:
• Setting goals: If you are contributing to an IRA and a 401(k) or similar employer-sponsored plan, then explain how you build these accounts now, while you are working, so you’ll have enough money to enjoy a comfortable retirement someday. And you can bring your children into the picture, too, by telling them that another financial goal is saving enough to help send them to college or to further their education in other ways.
• Value of understanding the financial markets: You may actually be quite surprised at how interested your kids are in investing, especially the concept of owning companies through stocks and stock-based vehicles. Depending on their ages, you might even want to show them the progress of your own investments and describe, in general terms, how different events can cause the markets to rise and fall, especially in the short term. You could even discuss the difference between the basic types of investments, such as stocks and bonds.
• Putting time on your side: You might want to emphasize the importance of patience, and how investing is not a “get rich quick” scheme, but a process that requires decades of diligence and persistence. Let your children know that it’s of great value to start investing as early as possible, so you can put time on your side, giving investments a chance to grow.
• Living within your means: We all know that you can’t always get what you want. Stress to your children that you can’t just splurge on big purchases whenever you feel like it, because such behavior can lead to bad outcomes. Use concrete examples: If you have a car that’s several years old, then tell your children that it would be nice to have a new one, but you simply must wait until you can afford it.
• Paying debts on time: Tell your children that, no matter how good a saver you are, or how thrifty you try to be, you still have debts, such as your mortgage payment, and it’s important to pay these debts on time. You may not want to get too detailed about the consequences of missing debt payments — bad credit scores may not be that easy for children to understand — but you can certainly mention that if you’re always late on payments, you might find it harder to borrow money when you really need it.
By sharing these principles with your children, you will, at the least, give them something to think about, and you may well find that you’ve helped start them on the path to a lifetime of making solid financial moves. And who knows? If they truly master the ideas you’ve taught them, then one day they might give you some really nice Father’s Day gifts.
This article was written for use by local Edward Jones financial advisors. Edward Jones and its associates and financial advisors do not provide tax or legal advice. Chuck Smallwood, Kevin Brubeck, Tina DeWitt, Charlie Wick and Bret Hooper are financial advisors with Edward Jones Investments and can be reached in Edwards at 970-926-1728, in Eagle at 970-328-0639 or 970-328-4959 or in Avon at 970-688-5420.
The valley’s commercial and residential property markets are similar in some ways — availability is tight and nothing is what you’d call “cheap.”