What I taught my children about planning for their financial future.

A Five Step to Plan for Your Children’s Financially Security.
When I told you about my Mother the Entrepreneur in reply to the question, “What made you who you are?” I had no idea that it would create a flurry of interest in teaching your own children about money management, goal setting & staying focused.

So, I put the following questions out to you:

What kind of impression have you made on your children when it comes to managing money?
What are you doing to help your children set goals, work towards them and to stay focused on those goals?
I wanted the questions to make you think, tickle and titillate you…and did they ever.

Then you called, emailed and stopped me at the grocery store. You said to me, “Tell me what to do to help my children manage money successfully!” So, here is my advice to you.

The best way to help you in teaching your children is to tell you how I taught my children.

I taught my children to follow these five basics steps to financial planning using their life experiences at the time, and when they got older I told them apply these same plans. Now, I’m going to share these personal financial planning steps with you and your children.

Step one: Assess Where You Are Financially
Assess where you are financially, always know how much you own and how much you owe. Subtracting what you owe from what you own will determine your Net Worth.

Step two: Determine Where You Want To Be Financially
Set specific, measurable short term, medium term and long term goals.
 Determine what age you want to be financially independent.
 Be sure your savings are diversified. Invest in some savings, some bonds, and some mutual funds.
 Work to achieve the goals and watch your spending.

Step three: Design a Plan to Reach Your Goals
 Create a plan for emergencies.
 Keep credit at a minimum.
 Buy only what you can pay off every month.
 Start investing or continue to invest according to your risk tolerance.
 Set up a retirement plan and contribute to it monthly.
 Set up a vacation savings account.

Step four: Implement the Plan Start tracking your income and expenses using a spending form or spreadsheet.
 Talk to a Financial Advisor at your bank; choose one you feel comfortable with.

Step five: Monitor the Plan
 Use your spending plan to track your progress on your goals monthly or at least quarterly.
 Update your Net worth Statement at least quarterly, but preferably monthly.
 Make adjustments in spending as necessary if you are deviating from your plan.

The time I spent with my children talking about money and the benefits of having money to do the things in our everyday life has paid off. All my children have done exceedingly well financially and they are still continuing on the plans they set so long ago. We still discuss their plans with them once a year and make the necessary changes based on their new goals.
Teaching children about money is different in every family, as different as every child is in each family. The most important thing is not to keep family finances away from children. They need to know what the family is going through. After all, they are part of the family unit.
Academic qualifications are important and so is financial education. Without proper financial education how will our children ever gain the tools to manage their money successfully? The best time to start preparing your children is now. Financial education is not part of the curriculum in our schools, so this job is the responsibility of us, the parents.

<em>If we talk about literacy, we have to talk about how to enhance our children’s mastery over the tools needed to live intelligent, creative, and involved lives.
Danny Glover

Tessa- Marie Shillingford is the author of Controlling the Debt Monster. She is Personal Financial Planner, with a designation from the Institute of Canadian Bankers, and a Financial Counselor certified by the institute of Canadian Banker. She is presently a Program Facilitator of Financial Literacy at JVS Toronto. Tessa- Marie was employed by TD Canada Trust for twenty years in the retail section of the bank. During her tenure at TD Canada Trust she held various positions interacting with customers of the bank. As a Financial Advisor and Manager of Financial Services she led a group of Financial Advisors in helping customers of TD Canada Trust successfully manage their finances. Details of her book… Controlling the Debt Monster, can be found at http://www.controldebtmonster.com

9 thoughts on “What I taught my children about planning for their financial future.

    1. Hi Corrine, Thanks, I will always enlighten, educate and courage others and now I have the opportunity to do that with the blog. So m any people are calling asking for personal advise and help. I love helping and sharing.

  1. Even though I do not have children yet, these tools will help me add onto the financial plan that I’m working on right now and this will also educate me on what to pass down to my children in the future. In addition, I can share this Blog with others who are just beginning or starting a family. I don’t know why children and teens aren’t financially educated. They really should implement this into the school system!

    1. Venessa, thanks for taking the time to write your comments. You see you are taking this as a plan although you do not have a family yet you have decided that this is something you will use with your children, this is great planning and when the times comes I know for sure that you will be well prepared to help your children learn about finances. It is great that you have decided to share the information you learnt with others, continue to share the blog site because all it takes is each one, to teach one. My Mission Statement is..To Enlighten, Educate and Encourage eveyone I meet to successfully manage their finances. I am hoping that one day financial literacy will be taught in our schools which will better prepare the next generation.

  2. Hi Tessa-Marie

    I enjoyed the story. I have some questions for you. I have two children a girl that’s 6 years old and a boy that’s 2 years old. At what age should I start teaching them about saving their money and not spending it on candy and toys? Do you think they should have their own piggy bank? If yes, when should I give them money to put in their piggy bank, when they do a good job or as an allowance?

    1. Hi Sandy: Wonderful questions: Sandy its never too early to begin teaching children about money, I started with my three the moment they began asking me to buy toys, Macdonalds and all the things they wanted which was around the age of two to three. I explained why it was not possible at this time. I always tried to stay away from words like we cannot afford it, or I don’t have any money. Insteady I said this is something we need to plan for even if was buying Macdonalds, I would say this is not the week we go to Macdonalds we planned it for next Thursday after we have been to the Library or after your Hockey game or Girl Guides. They grew up knowing that we always planned to spend money. Children should definitely have their their own piggy banks and they should be taught to save in that bank for something special. Everyone wants to be rewarded when they do a good job it could be because they brought home a good grades, or the clean their room, pick up their toys, brush their teeth properly, its up to you, but for sure they need to be rewarded.

  3. Good to know the abovt mentioned information about how to save. The story is really interesting and educative, especially the fact that children should be aware of their family financial situation. I quiet agree with this a whole lot and I can identify with that.

    I know for sure, that there are a lot to learn from you aboult life in general and most especially financial aspect of life. Please can you bring me closer? I need this……….big time.

    Thank you very much and stay blessed.

    1. Hi Christy, I am happy that you found the blog interesting and educative. Children are part of the family and just letting them know a little of what is happening financially will help release some of the presure that the parents are experiencing with their finances. It is amazing what children can understand and with the knowledge they too will find ways to contribute to making sure the family financial goals are met.

  4. Hi Tessa,

    Recently read your excellent article Sway this month, so I decided to hit your blog. Enjoyed the blog immensely. I work at an Adult Literacy Program in Toronto East called PTP Adult Learning Program. We are always interested in providing informational seminars to our adults. I would be very interested in connecting with you professionally.

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