Retaining Wealth: Imparting Financial Literacy To Young Kids
Nov 10, 2023
As-Salaam-Alaikum everyone! Welcome back to Muslim Women Invest.
Today, I’m tackling a topic that, as a mother, I’m very passionate about: minor investing.
When I say the words “minor investing,” a lot of people are confused about whether the term means investing for kids or investing in small amounts, so let me clarify: minor investing is known to the investing world as investing for young kids.
Yes—kids can begin investing at an early age! Investing isn’t just for adults—in fact, Warren Buffet, who is a giant in investing, was around ten or eleven when he bought his first stock.
In real estate, they say location is king; in investing, beginning early is king.
And if you don’t know how to talk to your kids about investing, that’s all right! It doesn't need to be complicated. It doesn't need to be difficult. I’m going to tell you how to get started…
Financial Literacy
Introducing your children to investing can be as easy as talking in front of your kids about how you budget and making them part of the conversation. My second child, Maha, is only seven, and we’re already having these conversations.
That might seem very young to begin teaching these concepts, but it’s incredibly important that we start early…and that we understand why it’s important to do so at all.
Financial literacy is not taught in schools and colleges. A lot of us graduate without having any concept of what a budget is or how to do our taxes. And we certainly don’t know how to not only make money or save money, but also how to keep money in our family.
Without financial literacy, you are not going to retain your wealth. So even wealthy families have to make sure they teach it to their children; otherwise, that wealth will vanish in a generation.
So, financial literacy is not only to make you rich or wealthy, nor is it only to change the trajectory of your own life; it is a tool to give a head start to your kids, to help them give a head start to your grandkids, and also to retain that money throughout the generations.
Asking Questions
If you have a home environment where you are teaching kids about finances—if you're talking about money, if you're talking about budgets, and if you're talking about the importance of saving—these kids will grow up already having a head start compared to other children.
You can ask them about budgets, and what happens if you “break” a budget. You can even sit down with them while you’re budgeting for the month and explain each item to them.
You can break it down and tell them, “This is our budget for the groceries. This is our budget for gifts. This is our budget for eating out.” And by talking about these things, you can bring them back up when you go out grocery shopping. You can show your kids your total and compare it to the budget you set, for example.
Eventually, just by doing these simple things, your kids will start understanding the concept of having a budget and why it is important. And as they get older you can begin to expand into teaching them about investing and growing your money.
When you have your children take part in the family’s financial practices, I promise you that it will not only improve their financial literacy, it will also boost their self-esteem. It will empower them and make them feel involved in the family’s financial picture as a whole.
These conversations can be so simple—you don’t need a doctorate degree to teach your kids about finances. In fact, to see a real-life demonstration of a simple conversation you can have with your children about money and budgeting, you can listen to Episode 10 of Muslim Women Invest to hear me have this exact conversation with my seven-year-old, Maha!
And if you aren’t sure how to go about these conversations because you yourself have not had a full education on financial literacy, then you’ll want to sign up for my upcoming masterclass.
It is a class for beginners, and when you attend, I will be helping you create a financial plan tailor-made for your family. The link to sign up can be found below.
If you want to have a financial plan that works for you and your family in 2023, if you do not want to waste another full year without having a financial plan, please join me. At the end of the hour, you will have that plan in place. I can’t wait to see you there!
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Don't end 2023 without a financial plan for your family! Sign up for my upcoming masterclass now: https://www.invest4lifemk.com/offers/jCmdPRYj/checkout
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