Money and finances can be difficult topics to discuss, but it is an essential conversation that needs to take place with children. With the proper guidance, your child will learn key lessons about money management and develop healthy financial habits. In this episode, Joel will share his family’s approach to helping his children learn about important financial topics.

Probably the number one lesson to establish early on with your children is the value of saving.  Start by teaching them the basics, such as setting aside a portion of their allowance or birthday money, and then move on to larger concepts like goal-setting for longer-term savings. Once your children understand that saving is an important part of financial responsibility, you can start helping them learn about investing.

One way that Joel helped enforce the importance of saving was by purchasing their first cars. They told the kids they would match their savings and give them that money to put towards a car, which motivated them to save more as they were growing up.

It also taught them about work and putting money away as you earn it. They all got jobs pretty early and even learned that some jobs (like working for Dad) is a pretty comfortable environment. But understanding that hard work helps you earn and save helped them become great savers.

The other discussion that you’ll eventually need to have with your children is about college funding. Many parents are having to decide between their own retirement and helping their children pay for college so you’ll need to have some tough and honest conversations about what’s best for everyone.

Having the right conversations about money and finances early on can help your children develop good habits for their future. With the proper guidance, you can help them understand saving, investing, and managing debt so that they are prepared to make smart financial decisions in the future.

Here are some of the things we discuss in this episode:

0:56 – Applying Steve Martin quotes to financial planning

6:18 – Is it fake, Jake? Hedge funds are cautious

10:40 – Maibag question on helping with childcare expenses

13:04 – CEO’s Corner with Joel Johnson: Behavior with money

20:49 – Mailbag question on large Roth conversion amounts.