Raising Financially Savvy Kids: 3 Lessons Every Parent Should Teach

Over 85% of parents report financial literacy as a top-3 skill they want to teach their children, but most don't know where to start. These 3 lessons will help you teach the basics:

1. Create more than one income stream

One of the biggest misconceptions we see parents teach their children is that financial literacy starts with spending less money. Yes, of course conscious spending and budgeting can be a very important financial habit, but it's far from the #1 skill of financially successful people.

So, what is the #1 characteristic of wealthy people? Multiple income streams. Here are a few examples of different income streams:

1. Job income

2. Side hustle income

3. Investment income

4. Rental property income

5. Business owner income

6. Licensing or royalty income

7. Property sale income

8. Dividend income

9. Fixed interest income

These sound intimidating and hard to do right? They actually are not! Here is a translation to some easy examples:

1. Job income: get a part-time job like Uber driving or delivery

2. Side hustle income: learn a skill from youtube and earn on a site like Fiverr

3. Investment income: put a small amount of money each week in an S&P 500 index ETF or mutual fund

4. Rental property income: this doesn't have to be real estate, you can rent out your car on sites like Turo or GetAround

5. Business owner income: start an e-commerce business online with tools like Shopify or become a seller for Amazon

6. Licensing or royalty income: get paid to create design assets on Canva Creators

7. Property sale income: sell domain names via sites like GoDaddy or Sedo

8. Dividend income: buy a dividend stock and get paid over time

9. Fixed interest income: find a fixed interest investment that pays you mailbox money

Pro-tip: a recent study found that habit formation starts at the age of nine so don't wait to teach the importance of building multiple income streams!

2. Wealth is never quick or easy

If you watch your teen scroll through TikTok you will probably see headlines like "Easy way to get rich" or "Make money in 5 minutes". The harsh reality is that wealth is neither quick nor easy.

You might be surprised to learn that if your child put $100 a month in the S&P 500 index they would have over 15 million dollars by the time they were the same age as Warren Buffet. Encourage your child to start investing as early as possible. It can be as little as $1 a month. It really isn't about the money, its about the habit they build.

Pro-tip: our app Jetson allows you to allocate a recurring deposit on a weekly or monthly basis for your child. Get started today!

3. Understand how the system works

The creators of the financial system attempt to decieve common consumers by making it sound complex. If you don't understand how it works, they can take advantage of you. This will continue to be true for your child, and likely their children as well. So how do you stop this cycle?

You get smart. Learning about any financial product before you use it is a good start. Here are some good questions to research:

• Is a high-interest bank account a good place to keep your money?

• Historically, what are the highest yielding investing products?

• How much do loans cost the average consumer?

• How can I positively effect my credit score?

• Are credit cards really free?

Pro-tip: financial education courses are much more common than they used to be. Some great organizations like Boys and Girls Club, DECA, Junior Achievement, Young Investors Society and FBLA all offer financial education.