In honor of Mother’s Day, we sit down with our own Laura Corbiani, CFP® and mom to four-year-old Elsie to hear her thoughts on the importance of teaching her daughter about financial literacy.
Do you plan to give your daughter financial advice?
Yes, I plan to – it’s very important. Since we live in an age of information overload, she will receive “financial advice” from somewhere. I’d prefer it be from me rather than ads suggesting you can spend your way to happiness or a get-rich-quick video on TikTok.
How early will you start talking to your daughter about money?
She’s only four, but we’ve already started the conversation. Talking about money is essential, and I believe the conversation needs to start earlier than we think, like other important (and potentially uncomfortable) conversations.
What financial advice will you give, and at what stages of her life?
We have only talked about how people use money to trade things with one another and are working on identifying the difference between a want and a need. As her mom, I’m curious to see how she naturally handles money. I was instinctively a saver- I didn’t have a problem saving almost all of my babysitting money.
Like all parenting things, I’m not sure what to expect as she gets older. For now, I’m happy being her mom who goes to work and, as I explain it to her, helps people make good choices about money.
I plan to have open conversations with her about money as they come up throughout her life. I intend to take the mystery out of money for her because understanding one’s finances is fundamental to becoming an independent person. I want her to feel as comfortable negotiating a full compensation package as she is balancing her budget.
What do you wish someone had told you about finances when you were younger?
Two things stick out to me. First, there is such a thing as “working smarter, not harder.” For example, I graduated from college in a tough job market (2008). Fortunately, I landed a good position and started my career in scientific research; however, I did not start saving into my 401(k) right away. If I had started saving even a small percentage of my paycheck, it would have made a huge difference to my future self. Especially since it was close to the bottom of market during the Great Recession.
I didn’t understand risk when it came to finances and how there are appropriate times to take it. I was too conservative for the first few years. Additionally, I missed out on some company match dollars. It was not until later that I started to learn about the power of investing and how to make my money work “smarter.”
Secondly, I wish someone had explained that there is often an emotional component to financial decisions. Knowing this would have helped me navigate negotiations early on in my career. Instead, I felt a lot of needless guilt because I mistakenly believed it wasn’t “nice” to ask for a raise and that I should be grateful to just have a job. Therefore, I likely did not advocate enough for myself in my 20s. Looking back, I’m grateful to have had those experiences. They were hard lessons, but I learned from them and believe they’ve made me a better advisor. Now I am excited to talk about topics like these with younger people.
All people do better when they understand their finances. Confidence comes through knowing your finances and how to make them work for you. I meet with plenty of young adults through the company retirement plans MCA manages, and it’s fantastic to see their faces when they learn how compound growth can help something small like a few dollars a week turn into hundreds of dollars if you invest it appropriately and give it time to compound and grow.
I often say that managing your finances can be like exercising. Saving and investing, like exercise, can be painful in the moment, but over the long term, it builds a healthy base of confidence and strength that you can fall back on later. Small changes make huge differences in the long term, and it takes discipline and sometimes doing the opposite of what’s fun or gratifying at the moment.