Westfield resident and financial advisor Jeff Romond will offer parents some ideas on how talk to their children about money and savings at 7 p.m. Thursday, March 22 at the Scotch Plains library.
A new father himself, Romond said because the concept of saving versus spending isn't taught in school, it is that much more important that parents discuss it with their children.
"You might learn how to dissect a frog and you'll never use that again but we all need and have to make financial decisions every day of our lives and that's not being taught," he said.
While Romond said each of the Union County families he works with in his practice is unique, many have the same concerns about how to teach their children the basic tenets of fiscal responsibility.
"I'm the financial coach for my clients so I started thinking, 'what can I give them to help them coach their kids,'" he said.
The advisor explained that because many children as well as adults benefit from visual learning aids he will be giving out piggy banks that are divided into four categories: saving, spending, donating and investing.
"It's a teaching tool," Romond said. "The four separate chambers get kids to start thinking about how to allocate money they might get as an allowance or receive as a gift."
The 37-year-old said he has fond memories of watching interest mount in his passbook savings account during his youth.
"I remember raking lawns and waiting for my account to earn enough interest to buy a fishing pole," Romond said. "Gone are the days of passbook savings accounts where you could see your money adding up. With online banking, the concept that money can make money is really lost today."
While the fundamental principles of saving can seem like a complex matter to explain to a child, Romond said breaking it down into three key concepts can make it easier for parents.
"Everyone has a finite amount of money that comes into their lives," he said. "You know the old 'money doesn't grow on trees' is important because we have to talk to children about saving versus spending. This also teaches them patience, which is important in all aspects in life."
A second component that is vital for parents to keep in mind is to lead by example.
"Looking at the idea of savings historically, during the 1950s, 1960s and 1970s, people had double-digit savings," he said. "Because they grew up during the Depression or were raised by parents who had lived through it, they knew that money was finite and so to save 10 to 20 percent was important."
Romond joked that while he doesn't like to "blame it all on Madonna and the 'Material Girl' era of the 1980s and 1990s," the amount families save has been in a steady decline, dropping as low as between two and five percent.
"It's scary," he said. "How are we teaching our kids if we're not doing it ourselves?"
A third factor that Romond said is important to pass on to children is that money can come from money.
"Just like I waited for the interest to buy my fishing pole, children can learn that money can make more money," he said. "As grown-ups, we might be using that interest to pay for something bigger like insurance or a car payment. Again, this goes back to patience, waiting to buy something by saving for it."
Romond said he also has an entertaining video planned that will accompany his presentation and further illustrate the importance of patience and how that lead to greater rewards. Following the program, Romond will be available to answer any questions attendees might have.
"I hope we have a nice turnout. It'll be a fun half-hour. I'm going to furnish each parent with a bank so they'll go home with a piggy bank and some lessons," he said.
Pre-registration is recommended for the event. To register, visit the Scotch Plains Public Library’s reference desk, call the library at 908.322-5007 x204 or email email@example.com. Registration is also available online at http://www.scotlib.org/sppl/events/.