Former single mom Susan Brown Burklin worked hard providing for her four kids. As they prepare for college, she says they’ll need to provide for themselves soon. Teaching her only daughter has been especially important.
“Sometimes I think I'm harder on her because I know that some women do feel they have the option [to] marry someone that will ultimately take care of them,” Burklin said.
Too many women feel that way according to financial expert Ellen Rogin.
“Sadly, I've had conversations with women in their 20's now and I see although they're really well educated they still don't have a handle on their money,” explained Rogin.
She said moms need to teach their daughters about finances in order to avoid the three most commonly made mistakes. One: being a bad role model.
“Kids learn from us from what we say and they watch what we do,” Rogin explained. “If we're not being a good example they're not going to learn good money lessons.”
Mistake number two is waiting too long to teach.
“In our family we gave them allowance and divided it up in to three parts: one was for saving, one was for spending, and one was for giving,” she said.
The third mistake is treating their sons differently.
“There really shouldn't be a difference in terms [of] how you're talking about money, whether those are expectations about earning money or saving and investing down the road,” Rogin said.
Susan's daughter, Allison Brown, said even though it would be nice to have a family of her own someday, thanks to her mom she will never have to worry about her financial security.
“It’s important for me to provide what I want for myself and not to fall back on someone else taking care of me,” Brown said.
Allison’s mom said her own mother didn’t teach her about money when she was younger, and said she struggled quite a bit financially because of it. She said that’s why she’s making sure her daughter doesn’t make the same mistakes she did.
Kid Investments that Pay Off Big
Many things you want for your children may seem out of reach, but there are some ways to make little investments now and see big returns later.
Make a $200 Deposit in a 529 Plan: A tax-free way to save for your child’s college education. Since it is an investment account, money you deposit will grow at about 7% a year. For example, if you deposit just $200 when your child is 5 years old, by the time they hit college your money will have more than doubled. Think about how much they’d have at 18 years.
Open Their First Savings Account: Kids whose parents opened a savings account in their name were six times more likely to go to college, according to research from the Center for social Development at Washington University. It didn’t even matter how much was in the account, just that they had it.
Pay Them $20 for Cleaning the Garage: Experts agree that paying children cash for tasks that go above and beyond their regular duties will help you and them reap benefits later. They’ll have solid finances and you won’t have to bail them out or support them financially.
Give $100 to Make Their First Financial Mistake: It might seem like a lot, but better $100 now than $1,000 or $10,000 later, according to Certified Financial Planner Sophia Bera. Sit down with your child and ask questions about the mistake, if it was worth it, and how could they have avoided it. Think of the $100 you just spent as education for your child.
$12 - $60 for a Year of Boy or Girl Scouts: Girl Scout members now learn financial literacy skills. Some added badges include Money Manager, Business Owner, Budgeting, Comparison Shopping, and Financing My Dreams. Boy Scouts have similar badges in Entrepreneurship, American Business, and Personal Management, which requires them to save up, budget, and plan for a major purchase.