Published in: Banks | April 17, 2020
Why Family Financial Meetings Are Important -- and How to Do Them Right
By: Dana George
Family financial meetings might just mean your children don't have to learn about finances the hard way.
Anyone who has raised kids will tell you that children learn more from what we do than what we say. And that may be one of the best reasons to hold family financial meetings. You want your children to see (and to participate) in your efforts to build a healthy financial foundation. When you make financial planning a family affair, you:
- Ensure that your kids learn how to handle money from you, rather than stumbling through on their own.
- Demonstrate that you value their opinions and model financially responsible behavior.
- Reinforce the idea of teamwork and how much easier it is to achieve goals when you work together.
- Make yourself available to answer your children's questions and to explain why you may, on occasion, have to say no to financial requests.
- Teach them the value of money and set the tone for how they feel about it.
- Help prepare them for the real world and provide a foundation for financial confidence.
Although snow days and shelter-in-place situations may tempt you to believe otherwise, the time you have with your children is limited. You have a small window during which they are especially mindful of what you teach them. Family financial meetings are one way to use that window wisely, to prepare your kids for any financial situation they may encounter in life.
Find a model that fits your family
Some families would rather finish dinner, put dishes in the sink, and sit back down at the kitchen table for their financial catch-up. Others prefer to meet in the living room (or another comfortable spot in the house) for their get-togethers. The point is to consider where you're most likely to keep the kid's attention and establish your meetings there.
Schedule it regularly
Plan a family meeting at least once a month. The operative word here is "plan." No one likes to have a meeting sprung on them when their heart was set on doing something else. Decide what day you're going to meet at least a month in advance and make sure it's on everyone's calendar.
Shuttle young children off
If you have children who are still too young and squirrely to take part, make sure they're in bed before you attempt to dive into the topics at hand. Who knows? By the time your younger children are old enough to participate, they may think it's cool to be one of the big kids.
If you've ever sat through a truly horrible movie just because the popcorn was so delicious, you know the value of offering noshable snacks.
Set a timer
If there's one thing that will make your kids miserable, it's the idea that a meeting is going to last as long as a revival service in the Deep South, circa 1950. Set a timer for 30 minutes or less and honor it. When that timer goes off, your meeting is over.
Have an agenda
Make a list of the issues you want to discuss before the meeting begins. Thirty minutes only seems like a long time when you're waiting for someone special to call. Otherwise, it flies by. Also, because things can get off track or disagreements can arise, don't pack the agenda too tightly.
More about that agenda
Kids like continuity, so stick to the same general plan each month. For example, the first thing you may do is discuss short-term goals (like how you're going to pay for soccer camp), and next it may be longer-term goals (such as your next family vacation). Make it a point to cover the family budget -- no matter which budgeting method you use -- and how well you did over the course of the last month. You accomplish this by tracking your spending and comparing what you've spent to what you have budgeted. If changes need to be made, now is the time to do it. If you (or your kids) have a special request for an upcoming budget, discuss any and all requests. After a while, kids will recognize how much a budget impacts their ability to purchase what they want.
Don't fake it
Children are human lie detectors. If you tell them that you value their input but continually discount it, they know the truth. Incidentally, they also know if you're snacking on potato chips after they go to bed. That's their super power.
The tone of your meeting is going to make an impression on your kids. If your jaw is so tight when you discuss money that it looks as though you need medical intervention, they will pick up on that. If you are relaxed and positive (yet focused) they will associate those reactions with financial planning -- which is great for them in the long run.
At a certain age, the questions are mostly going to be, "But why?" Still, it's important to use a little of the time available during your short family meetings to help them understand how money works. As they mature, they're more likely to ask about savings accounts and how old they need to be before they can invest.
Make it age appropriate
There is nothing healthy about telling a six-year-old that you didn't stick to budget last month because you bailed her Uncle Bill out of jail twice. Instead, explain that things come up on occasion that knock the budget off-kilter, and that's okay. The trick is to show them how to get your budget back on track and continue to work toward your goals.
There are an awful lot of things that your kids are going to learn from their peers or from their many mistakes. Family financial meetings help ensure that you're the one who teaches your children how to have a healthy relationship with money and how to avoid the psychological cost of debt.
These savings accounts are FDIC insured and can earn you 20x your bank
Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts can earn you more than 20x the national average savings account rate. Click here to uncover the best-in-class picks that landed a spot on our shortlist of the best savings accounts for 2020.