What if you could give your child a gift that was guaranteed to increase in value as she gets older? Something that would provide her with not only financial wealth, but also boosted confidence, decision-making skills, and preparation for becoming an adult? Financial literacy can offer your child all this and more—including some surprising extra skills and upsides. Here’s why it’s the best investment you can make:
She can beat the odds.
Financial literacy is correlated with improved financial behavior—increased savings, wiser investment decisions, and longer-term planning. Americans as a whole struggle with financial literacy, but women especially are behind. In a recent survey of retirement age women, only 18% passed a basic financial literacy test. Start investing in your child’s financial education from a young age, and you’ll have more time to make sure she makes wise money choices for longer.
It’ll pay for itself in the long term—literally.
Teaching your kid about personal finance from a young age allows them to start making great decisions very early in life, and some of those decisions yield long-term savings in a big way. Starting to save for college early, no matter the sum, will make a big difference thanks to compound interest. Plus, there are specific account types that won’t affect your child’s financial aid eligibility. If she understands the importance of long-term goals like saving for retirement, she’ll start saving at her earliest opportunity. A dollar she saves at age twenty will be worth much more than if she waits a decade to start saving.
She won’t give you a heart attack when it comes down to making big financial decisions.
All the skills involved in making big decisions can be taught on a small scale from a young age. These smaller choices, like what to do with an allowance or how to spend a birthday check, are good prep for much bigger, more difficult decisions, like dealing with the cost of college or budgeting as a young adult.
On the flip side, she’ll avoid major pitfalls by working with smaller sums today.
Since she doesn’t have large sums to work with as a young kid, the chances of her losing big-time are nearly zero. She can learn the same lessons from losing $10 on a bad financial decision in elementary school as she would for the same bad decision, but at an exponentially higher cost later on.
She’ll be immune to the spend-spend-spend culture.
Given their relative lack of income, it comes as a surprise that tweens have huge buying power in America—they influence over two hundred billion dollars in spending! Before she hits the tween years, set her up to make intelligent financial choices. You’ll end up with a more intelligent spender in this era of increased spending.
She may master some surprising skills.
If you’re teaching your child about money, you’re also teaching her how to weigh pros and cons, think long term, and make big decisions—all essential skills both in and out of the world of finance, especially as she grows up. Improved financial literacy encourages her to be more patient, thoughtful, and even-keeled. Before you know it, she might even be meditating!
She’ll be a real #girlboss.
There’s nothing like experience to boost confidence, and when it comes to financial literacy, women especially have a confidence deficit; only 20% of women feel prepared to make good financial decisions. Plus, they’re less likely to reach out for help, which only perpetuates the issue; only 47% of women surveyed said they would feel comfortable talking about money with a financial advisor. Equip your child with knowledge from a young age and you’ll boost her confidence for years to come, and give her the language she can use when she winds up in decision settings.
Parents want the best for their kids—for them to go to great schools, have the opportunity to expand their horizons, and live up to their full potential. Financial education is one way to help set your child up for a lifetime of success, and that education will make an even bigger impact the younger you begin. And these days, who doesn’t want a meditating, thrifty, mature girlboss for a daughter?