SVPN July 2018

finance

RAISING FINANCIALLY SAVVY CHILDREN

By Suzanne Hazlett

Suzanne Hazlett, MBA, CIMA®, CFP® is a Certified Investment Management Analyst® and CERTIFIED FINANCIAL PLANNERTM.

For more than 20 years Suzanne has worked with individual and corporate clients to help build, manage, and preserve their net worth. She strives to create a more approachable way for people to understand personal finance and its ties to life’s rites of passage. Her firm, HAZLETT WEALTH MANAGEMENT LLC, is based in Ketchum, Idaho. Each month, Suzanne will bring her financial savvy to SVPN, exploring different topics related to financial aspects of our lives.

Along with an unlimited volume of published books, blogs, and newsletters promoted to adults, an abundance of products exist that are aimed at teaching children about personal finance. So explore the marketed resources and then consider taking a different route as Nigel Whittington, Director of Syringa Mountain School in Hailey, Idaho, recommends, “Look for and seize the teachable moments in everyday life.”

Whittington relates the ongoing process of teaching financial awareness to the stages of child development. Child development refers to the process through which human beings typically grow and mature from infancy through adulthood. “You would provide a 3-year-old child very different information about money matters

than an 18-year-old. Matching appropriate lessons with the child’s development is essential,” he says.

Several years ago, when I was a new resident to our Valley, I contacted local schools offering my time and skills to design a financial education program that would appeal to middle or high school students. At the time, Nigel Whittington was the Middle School Director for the Community School. He took me up on my offer.

We agreed to create experiences over the academic term that would be of particular interest to 8th graders. I suggested we ask the kids themselves, what was on their minds, what about personal finance did they wonder?

They offered lots of questions. Here are a few:

“WHAT IS PHILANTHROPY?”

“Charity” and “donations” were familiar terms to these students, philanthropy was not. Philanthropy entails a larger scope of passion and altruistic concern for a cause. With the students we explored non-profit organizations. It was important to identify a cause that resonated with them on an emotional level. When I asked how many in the class had rescued pets, nearly every hand in the room went up. During one class session we invited Animal Shelter staff members and a couple of their four-legged charges. The students learned about the difference between for-profit enterprises and tax-exempt charitable organizations. They gained an understanding of the costs the organization faces and how donations of money, in-kind gifts, and volunteer

svpn-mag.com

235

PHOTO BY HILLARY MAYBERRY

PHOTO BY TESSA SHEEHAN

finance

support help to underwrite the expenses.

Takeaway: If charity is important to your family, teach your child to give. One way is to provide them with a list of charities and a proposed donation amount.

Together, research the organizations that pique their interest. Then find the cause that touches them. If possible, pay a visit with your child to the organization. Make the gift in the child’s name and ask that the acknowledgement be sent to your child.

“HOW DO WE BUY A HOUSE?”

We asked a local realtor to schedule a showing of a listed home with the class. We also invited a mortgage lender to join us. During the home tour we learned how houses are valued and marketed. We also learned why and how a borrower pursues a mortgage.

Takeaway: Whether shopping for a new home, car, or appliance, create an opportunity for your child’s engagement and involve them in major family purchases.

“WHAT IS A BUDGET and HOW DO WE CREATE ONE?” Budgeting

is nothing more than the process of creating a plan to spend and save your money. Making a list of tangible and familiar purchases is a great way to start—groceries, clothing, toys, or technology. In the classroom setting, each student created their grocery list and we added two columns—assumed costs and actual costs. The students attributed their cost estimates and then we took a field trip to the store for the actual price comparisons.

We used a similar approach with other common household monthly expenses.

Takeaway: Allow your child some choices in making purchase decisions and help them track their spending. It’s only through practice that we learn good habits and the consequences of poor decisions.

You have the power to create safe and controlled circumstances for those lessons.

“HOW MUCH DOES COLLEGE COST?” Each student was invited

to select their top three college choices. With professional planning software, while they sat in my office,

we produced reports for each of them showing annual tuition and book and housing expenses.

Takeaway: Proprietary software isn’t necessary for this type of exercise. Anyone can access relevant information with online searches.

The goal is to show them that there are expenses to consider and to talk about how they can be covered and by whom.

Be mindful of the examples you are setting and begin the conversations when they’re very young. By time your child is college-bound they should see the value in creating a budget, understand how to read their paystub, and have developed a level of confidence with other practical financial matters. Throughout their childhoods, consider asking your children what they wonder about when they think about money.

Sharing our views about money with our children shows them our values as well. It can also be beneficial to let them in on a secret: we may not have all the answers, but we can open the door to growing knowledge as a family.

svpn-mag.com

237