How baby boomers paved the way for parents talking to their kids about money


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Does your family talk about investments at the dinner table? If not, you might want to start.

A new report by the FINRA Investor Education Foundation and the CFA Institute brings new light to the investing impact that boomer parents have had on their millennial children.

Open conversations of financial and investment knowledge have helped shaped young adults into savvy investors early on — and it’s a conversation that future generations should take note of.

How boomers have influenced their children’s investments

The study found that millennials who engaged in early conversations about money and investing participate in the market at a young age.

Of millennials with taxable accounts, usually opened through a broker, 31 percent of them started investing before they were 21 years old. Of those young investors, 50 percent of them reported their parents talking to them about investing before they were 18, according to the survey.

“There’s a shift in the national conversation about money,” says Gerri Walsh, president of FINRA. “And that shift may well be paying dividends in a real way for younger workers.”

Walsh says these conversations are happening early because the parents of millennials, most of which are boomers, grew up in a world where their parents had pensions. Speaking about money, as Walsh puts it, was “very taboo.”

When boomers came of age, though, they faced the reality that they couldn’t rely on company pensions to fuel their futures.

The data suggests that while boomers have been approaching slippery futures in terms of retirement savings, they don’t want their children to face the same. As they’ve navigated a retirement planning world that puts much of the responsibility on themselves, they’re passing down knowledge to their children.

“People who are boomers and have millennials as children lived through a big shift (with retirement tools),” Walsh says. “And it’s changing the entire way families talk about money.”

How one family talks money

Vincent Martin, a 56-year-old father in Aurora, Illinois, knew that pensions were no longer a societal norm. He and his wife decided to teach their four daughters about saving for their futures early.

The conversations about money started when their children were as young as 6 years old. Martin and his wife started explaining easy concepts, like saving parts of their allowances to make purchases or fitting them into their budget.

Once his daughters reached their preteen years — around 11 or 12 — the conversations about saving for their futures started.

“We stressed the importance of paying themselves first and how it can affect their future,” Martin says.

Today, three out of his four daughters are saving for retirement.

How to start talking about investing early with your children

Bob Stammers, director of investor education at CFA Institute, says the earlier you speak to children about investing, the more comfortable they will feel about it in the future — which is what leads to success.

“It’s all about building confidence,” Stammers says. “The people who are non-investors are the ones who have very little confidence in their decision-making, and the ones that are taxable investors are the ones with a lot of confidence.”

Gaining knowledge and experience can build investing confidence, Stammer says. For parents who aren’t investors themselves, there are online resources available to bridge the gap.

“The ones that don’t have that knowledge should go out and get it however they can so they can pass it on to their children,” Stammers says. “There’s so much investor education and personal finance material out there.”

Other ways parents can help guide their children to success? Incorporating basic financial knowledge into everyday life. Stammers suggests parents teach their children financial responsibility by giving them an allowance and showing them the value of saving to make purchases.

Stammers adds that granting college-age children increased financial responsibility gives them the opportunity to make mistakes and learn from them before they make their own money in the real world.

Additional programs to help

Having open conversations about money and investing with your kids doesn’t have to end at the dinner table.

For parents who aren’t comfortable yet giving their children hands-on experiences with money, these two programs can give them what they need to succeed:

The Stock Market Game: This online investing simulation lets student have hands-on experience with building portfolios and trading. Students interested in participating don’t need to be in classroom to play; the game is available online and through an app.

Junior Achievement: Founded in 1919, Junior Achievement is the nation’s largest organization that aims to provide the youth with knowledge and skills for economic success. Program topics include entrepreneurship, economics, personal finance, investing and career development. Levels range from elementary to high school and are offered at JA centers around the country.

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