At Portman Wealth, we believe that empowering future generations with the knowledge and skills to manage their finances is essential for building and preserving a lasting legacy. Financial literacy is a cornerstone of long-term financial success. Therefore, teaching children and young adults about money management and investments can set them on a path to achieving their financial aspirations and continuing your legacy. This blog post will delve into why it’s important and how you can start educating the next generation today.

Financial literacy is more than just understanding how to save and spend money; it’s about making informed, well-researched decisions that can lead to financial independence and security. Here are some key reasons why financial literacy is crucial:

1. Early Habits Last a Lifetime: The financial habits formed in childhood and adolescence can influence an individual’s financial behaviour throughout their life. Teaching children about money management early on helps them develop responsible financial habits.
2. Building Confidence: Financial literacy empowers young people to make confident decisions about their money and to be actively involved in their financial matters. Understanding how to budget, save and invest builds their confidence to manage their money more efficiently.
3. Avoiding Debt: Educating young adults about the dangers of debt and the importance of living within their means can help them avoid financial pitfalls and the burden of unnecessary debt.
4. Preparing for the Future: Financial literacy prepares the next generation for major financial milestones, such as buying a house, funding education and planning for retirement. It equips them with the necessary knowledge to make sound financial choices for their future.

1. Start Early: Begin teaching basic money concepts to children as young as possible. Use everyday activities e.g. grocery shopping, to illustrate essential concepts like budgeting and the value of money.
2. Use Real-Life Examples: Demonstrate money management in real life. Show them how you budget, save and make financial decisions. Discuss the importance of saving for emergencies and future goals.
3. Give an Allowance for Chores: Give children an allowance for completing specified chores. This teaches them the value of earning money and the importance of working for what they receive. Encourage them to save a portion of their allowance to help impress on them the importance of savings.
4. Practice Budgeting: Help teenagers create their own budget. Whether they have a part-time job or an allowance, teach them how to allocate money for spending, saving, and giving.

Investing your money is a cornerstone of building wealth and giving you financial freedom. That is why it is essential to introduce the basics at a young.

1. Explain the Basics: Teach concepts like stocks, bonds and mutual funds in simple terms. It may help to use analogies they can relate to, such as comparing stocks to owning a piece of a company.
2. Open an Investment Account: Consider opening an investment account for your children. This allows them to start investing early with your guidance and advice. Involve them in the entire process, from selecting investments to tracking their performance on a regular basis.
3. Teach the Power of Compound Interest: Explain how investments can grow over time through compound interest. Use visual aids or online calculators to show how small, regular investments can lead to significant growth over the years.
4. Encourage Long-Term Thinking: Emphasise the importance of long-term investing. Teach them to think beyond short-term gains and focus on long-term financial goals.

1. Books and Online Resources: There are numerous books and online resources designed to teach financial literacy to young people. Look for age-appropriate materials that explain money management and investing in an engaging way.
2. Financial Literacy Programs: Enrol your children in financial literacy programs or workshops. Many schools and community organisations offer courses that teach essential financial skills.
3. Family Discussions: Make financial discussions a regular part of family life. Discuss financial goals, budgeting decisions and investment strategies together. Encourage questions and provide clear, honest answers.

Teaching children and young adults about money management and investments is one of the most valuable gifts you can give them. By assisting and guiding them to become financially literate, you’re not only helping them achieve their financial aspirations but also ensuring the preservation and growth of your family’s legacy for generations to come. At Portman Wealth, we are committed to empowering future generations with the knowledge and tools they need to succeed.