Are you involved in your family’s financial planning? If not, you may want to find learn how to play a larger role in your household’s budgetting and savings schedules. Though it’s always a good idea for you, personally, being more aware of where your family’s money goes can also be greatly beneficial to your children, especially in terms of teaching them financial literacy. Experts Gail Konstantin, the senior vice president wealth management and her daughter Lauren Konstantin, CFP® – financial advisor, from Hudson River Wealth Management, UBS Financial Services Inc., in White Plains share their tips for getting more involved in your family finances.
Women are often the primary caretakers in the family, not only for themselves, but also for their parents, their spouses and their children. In contrast to this responsibility, recent research from UBS found that more than half (56%) of married women leave investment and financial decisions to their husbands.
In our experience, as a mother/daughter financial advising team, we’ve found that women who aren’t already involved with their finances have an immense amount of potential when it comes to taking control of their finances. This will also set an example of financial responsibility for their children. We encourage spouses to work together as a team to make decisions about their money and budget accordingly for their mutual goals. That said, it can often be the case (as demonstrated by UBS’ research) that women are less involved in this process.
Here are a few steps mothers can take to get their children involved with money management and teach them financial literacy skills, while also educating themselves and playing a more active role in their own financial planning.
Outline your goals.
This can be a fun exercise for both the child and mother. Perhaps your child is younger and wants to save up for a new toy, or they’re older and are saving for a car. Either way, identifying the goals aligned with your future is key to ensuring you’re properly prepared financially. For parents, maybe they’re saving for a new house or a family vacation but having this discussion ahead of time is the first step in achieving both short-term and long-term goals.
Treat your savings like a bill.
Once a goal has been identified that you need to save for, budgeting accordingly is key. It’s often best to treat your savings like another bill. Whenever your child gets their allowance, they should instantly put a certain amount of it into their piggy bank to save for their future purchase. Likewise, a certain percentage of the parent’s paycheck should go straight to a savings account, to ensure it is being appropriately allocated to.
Receive sound financial advice.
For children, this may involve talking with their parents before deciding to save for an item or making a purchase. For the mother, this involves speaking with your financial advisor, who are there to educate and guide you in making decisions that you understand and are comfortable with. Women should ask as many questions as possible and make sure they understand every detail of the portfolio and ensure that it reflects their financial goals.
By helping your children take control of their finances as early as possible they will understand how to grow and protect their savings and they will be more likely to achieve financial success. Likewise, by implementing these tools for yourself, you will feel more in control of your financial life. You have the opportunity to shape your future and the legacy you leave.
