Money Matters: Alexa von Tobel & Financial Literacy for Kids

Photo of author

By admin

Alexa von Tobel is a full-time investor, founder and managing partner of Inspired Capital and author of New York Times a best-selling book With Fearless Finances. She’s also a mother of three—two daughters and one son—and perhaps it’s no surprise that she started sharing financial wisdom with her children soon after they could walk.

Now, von Tobel is helping set other parents and their children up for financial success with a new children’s book, Money Matters: A Guide to Saving, Spending, and Everything in Betweenpublished by Rebel Girls.

“I wrote this as a parent I work with trying to do my part to empower parents everywhere,” he said. This book is an in-depth guide to earning, saving, spending and everything in between, from creating a budget to getting started with investing to starting your own business.

The pages are filled with colorful illustrations of girls eating pancakes and throwing away their piggy banks, but the advice here is not given; this is a realistic, real-world look at financial planning from a certified financial planner (or, as von Tobel introduces himself in Money Matters“money doctor”).

Like most things in life, when it comes to talking to kids about money, Alexa von Tobel says it’s irrelevant. what you say as much as How you say.

Use appropriate tone and language when talking about why money is important to children

“Tone is the most important thing I want parents to focus on,” he said, referring to a University of Michigan study that found that the way you spend money can influence children as young as 5 years old. “Which means that when he is 5 years old, the way the house works with money has a great impact on the way the child handles and thinks about money in his life going forward. “

Alexa Von Tobel encourages parents to talk about money in a positive way. Even though financial matters at home can be stressful, as they often are, it’s important not to let that negativity seep into conversations your child may hear. He suggests keeping it as matter-of-fact as possible, and talking about money “in a way that I can’t,” with clear and specific words like, “money is manageable,” “I can be powerful with my money” and “Money is something I can’t control.”

That focus on voice should also be used when talking about earning money—in other words, how you talk to your kids about work. If you make a habit of talking down about your job, saying things like, “Ugh, the job is bad, I hate it, but I have to leave you to work,” your child internalizes a simple message: Work. it’s bad.

That doesn’t set them up for success, von Tobel explains, since almost everyone has to work to pay their bills. Make sure you discuss work in a positive way and on terms they will associate with fun. For example, “Hey, you know how you love to do puzzles and have fun doing puzzles? Mom loves puzzles… but her puzzles are bigger, and involve building companies and working with people and solving big challenges.”

Make saving and spending money easy for kids to visualize

Visual tools can be incredibly effective for young children who are just learning how money works. Alexa Von Tobel’s children have three piggy banks: a large one, for college savings, a medium one, for big things they might want to save for, like a bike, and a smaller one for everyday food and shopping. The idea is that they are able to see, with their own eyes and not in some mysterious way, that a big purchase will require a lot of savings, and that the money they withdraw from their bank accounts will actually add up.

“And they get it: ‘Great, I need to fill more in that one,'” he explains. “It is a visible image.”

Not long ago, he found himself in a situation that many parents and their children end up facing. They were at Target, and her daughter, then 4 years old, really wanted a toy; von Tobel would not buy it. They hesitated until von Tobel opened his arms—a visual aid—to show the number of properties it would take to buy the toy, which was more than a quarter of what he had at the time.

“We had a moment where he agreed and said, ‘OK, Mom.’ I understand.’ I realized it’s about using visuals to help them understand how much money, or how much something costs. It helps them to appreciate; they can take ‘no’ better,” von Tobel said.

Use virtual money to teach children financial literacy

Our money may be more modern than physical these days, but von Tobel also suggests going to the bank and withdrawing different bills and coins. Using virtual money is a way to improve their math skills, and seeing real dollars and cents can help children understand what money really is.

When they are older, go ahead and open a bank account for them, show them those numbers! (Although it might help to emphasize: These are secret numbers for our family to know.) Letting kids see their money and being able to watch it grow can be a powerful, again it helps to emphasize that saving, especially for big things like college, is hard work—that money doesn’t just appear out of thin air, and you have to be willing to save it over the years.

When to introduce complex financial topics to children

Of course, different financial concepts will make sense at different ages—your 5-year-old may understand money power better than interest rates—so when does it make sense to start introducing some of those complex financial concepts?

According to Alexa von Tobel, “As soon as in the second grade, when children learn the basics of math, addition and subtraction, they can learn everything about large parts of money.” From the age of 8, 9, 10, a child can understand the most important principles of money: saving, investing, borrowing, compounding interest.

And as your children grow, conversations about money will continue to change. If your child has an entrepreneurial spirit, for example—perhaps starting a lemonade stand or selling bracelets, like one of von Tobel’s daughters did—there are even more ways to set them up for lifelong financial success.

“Here’s my biggest, most powerful piece of advice: As soon as your child starts earning … that money can go directly into a Roth IRA for retirement,” he says. “You’re basically giving your child an extra ten years of retirement investing, which is very important.”

This must be foreign money your child has earned—it can’t be a grant—but you can open a Roth IRA for him, and he can make a little money as his business grows.

In Money Matters, von Tobel has some empowering advice for discussing the less-than-comfortable aspects of our financial world with your kids—for example, the wage gap. Rather than focusing on wage inequality, he manages to turn even this into a positive: Your work is important, and you are equal.

“It’s a simple concept, but the fact that your work is always the same… it’s a powerful framework,” he says. “It doesn’t matter who else is around you, in every situation and size, your work and effort is equal to everyone else.”

Photo courtesy of Alexa von Tobel.

Source link

Leave a Comment