Building Generational Wealth: Learning Financial Skills to Build Lasting WealthJan 22, 2023
You are more than capable of learning new money skills, building better relationships, and teaching your kids better habits with money, and it all starts with creating a relationship with money itself. When you think about any relationship, whether with your partner, your friend, or your kids, it takes effort and a continued willingness to learn better ways to contribute to the relationship's overall health. We build skills to continue growing with those we love, like better communication methods and learning how to meet each other’s needs. Similarly, we must put the same effort into building a positive relationship with money itself.
Learning New Financial Skills
Learning new skills can feel daunting, but we can take action toward massive results when we understand why we want to learn and break it down into more manageable pieces. Financial literacy is a skill most kids are never taught in school, leaving most adults cobbling together knowledge along the way to getting a car payment, taking out a mortgage, and committing to the heavy weight of credit card debt or student loans.
Frustration and anger often arise looking back on decisions we’ve made with money, knowing we were too stressed out to make a wise choice or didn’t have all the facts. You must forgive your past self and understand you did the best you could at the time, with a renewed effort to learn better ways to handle money moving forward. Knowledge is power, and investing in your financial skills and education can go a long way toward preparing you for financial situations down the road.
Building Your Financial Literacy
Learning about money doesn’t require you to sign up for college or become a math expert. In fact, the best way to begin building your financial literacy skills is with the simplest, most appealing method that works for you. Find an easy way to incorporate new financial tips into your routine. Consider adding:
- Personal finance blog articles
- Social media pages with helpful money advice
- An e-book on budgeting or money management
- YouTube or TikTok channels on finance topics that interest you
- A book about investing or starting a business
- A documentary about money or finance topics
- An affordable online course on a specific financial skill
- Coffee with a financially savvy friend for ideas or advice
- Email newsletters with relevant money tips
Building your financial literacy with small habits can better equip you for choices with money down the road and help you pass on essential money skills at home to the next generation.
Steps to Building Foundational Money Skills at Home
#1. Start With Awareness
Facing your financial situation is a huge step and often the scariest one. So if you’re ready to build more awareness around your money, you’re already off to a fantastic start.
Gather all your documents together and get a clear picture of your current finances. Pull information from all your bank accounts, debts, and financial responsibilities. Before you can change a situation, you must first see the bigger picture of your money. Laying it all out on the table can also reduce feelings of fear since you can see the whole financial picture and tackle it with a plan of action.
#2. Create a System for Tracking Money
Tracking your money, especially with a budget, is essential to building your financial foundation. A budget is a blueprint for where you want your money to go, and it makes room for everything you need and value in life. Finding a system for regularly tracking your money will help you feel more in control, more aware of your finances, and less stressed about having enough for everything you need. Setting an example of balanced money management at home can also help your children manage money better.
Start your value-based budget using a:
- Printable budget template
- Budgeting app
- Old-fashioned pen and paper
#3. Find Your Financial Rhythm
A budget isn’t set in stone, and our financial situation is constantly changing. Your budget and financial choices should adjust to the rhythm of your life. Finding time to check in with your finances regularly can help you make minor adjustments to your spending habits over time, reducing financial stress and helping you remain flexible through life’s changes. Consider a monthly money check-in with your budget to evaluate the previous month and set yourself up for next month’s success.
#4. Continue Financial Learning at Home
Support your financial rhythm by continuously learning new money skills and investing in financial literacy with small habits. Include your kids in the rhythm of learning by bringing new money topics and questions home. Start discussing basic money ideas with your kids by challenging their ideas about money and helping them understand how to create a positive relationship with money themselves. Teach kids how to build wise money habits with financial learning at home.
Build a regular rhythm of financial learning with your kids with ideas like:
- Weekly family money game night: Pick a regular night, like once a week, where the whole family plays games focused on financial learning. Monopoly is a crowd favorite, but there are countless options available.
- Money trivia: Make a habit of asking new money questions. The car makes an excellent place to play. Research new questions and recycle old questions to challenge learning. Make it a game between siblings or raise the stakes with small prizes.
- Regular allowance: Parents may offer kids a weekly allowance. An allowance can be a fantastic opportunity to teach kids how to budget for different categories like spending and saving. Set kids up with individual glass jars for each category as an engaging visual tool for teaching children how to budget. Let them learn how to spend and save their own money to practice new financial skills.
For more ideas and inspiration on how to teach your kids about money, check out My First Million Mind Map. It’s full of quick prompts and ideas with a financial therapist’s perspective to help you teach your child essential money skills and financial resiliency.
Photo by Ketut Subiyanto
Questions: email [email protected]
Mariah Hudler, MSW, MBA, CFT-I™ is a financial therapist, coach & consultant, who provides premarital financial counseling, financial therapy, financial coaching & consulting, and financial wellbeing services. She works with individuals, couples, entrepreneurs, and groups to build their balance and create a healthy relationship with money.
Disclaimer: This blog is for education only. Please consult with a qualified professional when you have any questions about your personal financial, tax, or legal situation. Information contained in this post is for informational purposes only and not intended to replace professional advice.
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