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Educating Your Kids Beyond Their Lemonade Stand

April 2018 
by Michael Lynch

While talking to children about money can seem taboo, it’s never too early to start discussing the importance of saving.

When we were children, our parents always seemed to be yelling about the most mundane things.

Eat your vegetables!
Make your bed!
Finish your homework!

Though we couldn’t understand at the time why they were determined to control our lives (or ruin them), as we’ve grown up we’ve realized the importance of these small habits. Our parents were just trying to make sure we were healthy and equipped to handle adulthood. But there was a major piece missing. Conversations about finances.

While talking to children about money can seem taboo, it’s never too early to start discussing the importance of saving. April 20 is Teach Children to Save Day and it’s a great opportunity to give your clients pointers on how they can talk to their kids about the importance of financial responsibility. The key to encouraging children to care comes down to three things: focus, frequency, and fun.

1. Focus
Saving is timeless, and it should remain a priority throughout the year, not just on a recognized day. However, keeping children focused can be a struggle in and of itself. Having a goal to concentrate on is necessary, whether it’s having enough money for a new pair of shoes or a video game, or a bigger goal like paying for college.

Regardless of the end goal, having small, attainable milestone goals, like hitting specific dollar amounts, is essential and can be extremely beneficial for children (and their short attention spans) to remain invested in saving. To ensure your clients keep their children interested, they could also offer them a “bonus” whenever they reach one of these milestones. Your clients could add an extra $10 to that week’s allowance.

2. Frequency
Establishing a routine for saving can be advantageous to ensure it’s a habit that sticks. Whether it’s putting away money weekly or monthly, establishing a regular frequency is crucial for children to be able to be diligent and committed. Have your clients work with their children on setting up how their allowances will work, what they will have to do to earn it, and what dollar amount they should consistently put away. 

3. Fun
The best way to learn for anyone is when a topic is enjoyable. Encourage your clients to be creative. A tried but true way that stresses the importance of saving is giving their kids an allowance for help around the home, but a twist on this for the digital age is to have them open a bank account. They can use the app for the bank and watch their money grow, as opposed to throwing quarters in a piggy bank. Your clients could also plan additional out of the box ways to earn extra money on top of their allowance so that it can be a memorable learning experience.

For children who are a little older, your clients could even explain how the stock market works, and invest a bit of that saved allowance money in stocks or funds that interest them. This could be a beneficial way to introduce them to what can be complicated subject matter.

Many a millennial have complained how they will never forget learning in school that the Mitochondria is the powerhouse of the cell, but that they don’t understand how to do their taxes or how a mortgage works. Teaching your children the importance of saving at early age instead of yelling at them to go to sleep could pay dividends in the long run.

Michael Lynch
Vice President, Strategic Markets

Michael Lynch is Vice President of Strategic Markets for Hartford Funds. In his current role, Mike is responsible for engaging and educating both financial advisors and their clients about current and emerging opportunities in the financial-services marketplace. These opportunities range from tactical strategies in areas such as retirement-income planning, investment planning, and charitable planning, to anticipating and preparing for long-term demographic and lifestyle changes.

Mike joined the organization in 1993 as an annuity client service specialist. In 1997, he joined the Advanced Product Marketing department, where he developed an extensive knowledge of estate and retirement planning. In 2004, Mike became a regional sales director. In 2006, he became Vice President and national director of The Hartford’s Retirement and Wealth Consulting Group, which provided thought leadership and financial education focused on retirement and small-business planning. In 2012, he joined The Hartford Mutual Funds.

Mike earned his bachelor’s degree in business administration from Eastern Connecticut State University. Mike is a registered representative of Hartford Funds Distributors. He is FINRA Series 6, 63, and 26 registered and holds a life, health and variable insurance license. He currently lives in Charlotte, North Carolina, with his wife, Kim, and their children, Josh, and Em.

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Investing involves risk, including the possible loss of principal.

Michael Lynch is a registered representative of Hartford Funds Distributors, LLC.

Check the background of this firm/individual on FINRA's BrokerCheck.