In honor of Father’s Day, we chatted with Mark Satkoski, CFP®, Principal at Midwest Capital, and dad to 8-year-old Maisie and 5-year-old Sammy to hear his thoughts on teaching his kids about financial literacy.
Do you plan to give your kids financial advice? If so, can you share a couple of examples with us?
Of course! Their dad is a Certified Financial Planner, and their mom is a Certified Public Accountant, so they are going to get financial advice early and often. In general, at this age, we want our kids to learn through experience vs. us just telling them what to do. For example, they receive money from time to time from birthdays and other events. We remind them of their options to either save, gift, or spend their money.
Maisie just saved up $100, which was enough to open her first bank account and understand how interest works (however small it may be). She rolled the coins and counted the dollars, and we set up an appointment to have her go into the local branch. She was pretty excited!
While we encourage them to prioritize saving and gifting, we believe it is important for them to make their own decisions, even if it results in purchasing another overpriced stuffed animal. Once they realize the stuffed animal cost them $15 of the $30 they have, it makes them question if it was a good decision. I’d prefer they experience making poor decisions with money at a young age, so they learn how to make better decisions later in life when the consequences are more significant.
What would they say if we asked Sammy and Maisie what their dad does for a living?
They’ve been asked this question before, and both say I help people save money.
Do Maisie and Sammy’s differing personalities influence the financial advice you will give each of them?
We haven’t had to at this stage, but we might need to at some point. Maisie tends to be more cautious, while Sammy is more of a risk-taker. Whether that plays out in how they handle their finances remains to be seen. Regardless, we will continue to emphasize prioritization. We encourage them to save and give before they consider spending. When they get to spend, we try to show them the value of creating experiences vs. accumulating “stuff.” It’s easier said than done with a five and 8-year-old, but we’re giving it a go.
Fast forward to when you are retired. Will you keep your kids updated on your late-life financial plans? If so, why?
Yes. One of the best gifts you can give your children is peace of mind that you are financially secure once your working years are over. While they won’t need to know every detail right away, eventually, we’ll need to share more information. It will probably be a gradual process with additional transparency as time passes. This should help them understand our financial plan and how it might impact their own.
Any Other thoughts?
I was happy to hear that Michigan will be the 14th state to require high school students to take a personal finance class before graduating. Finances can be a difficult topic to discuss with kids. However, I believe it is better to start earlier rather than later. In a world full of consumerism, the ability to avoid the temptations of senseless purchases, and prioritize what really matters, is a skill set I want my kids to have. If we do a decent job over the next few years, it should be an easy course for them to pass in high school.