S4-11: Teaching Kids the Value of Money & Budgeting Resources
On this week's episode of Finance Explained, Meghan discussed the financial pressures during the holiday season, emphasizing the importance of tracking spending and creating a personalized budget. She also recommended finance and investing books for young couples and stressed the importance of teaching children about the value of money. Meghan highlighted the need for teenagers to understand the financial implications of their decisions, particularly regarding higher education. Additionally, she provided an update on the current state of the housing market. Listen to the full episode below or wherever you listen to your podcasts.
Meghan, also known as the Family Finance Mom, hosted a discussion on personal finance, economics, and market news. She highlighted the potential pressures on people's personal finances during the holiday season due to increased spending and the impact on the broader economy. Meghan announced her plan to closely monitor economic data such as consumer spending and retail sales in the coming weeks.
Budgeting: Tracking and Tailoring Spending
Meghan emphasized the importance of tracking spending and creating a personalized budget. She pointed out that apps that automatically sync with bank accounts can sometimes limit the behavioral benefits of budgeting. Meghan highlighted that the purpose of a budget isn't to restrict spending but to gain a clear understanding of where money is going each month and whether it aligns with personal values and financial priorities. She also discussed her budget workbook, which guides users through the process of creating a budget tailored to their unique situation, and the importance of regularly reviewing and adjusting the budget based on spending patterns.
Get Busy Moms Budget Workbook HERE!
Finance Book Recommendations for Young Couples
Meghan shared her recommendations for finance and investing books for young couples based on her personal finance philosophy. She suggested starting with The Psychology of Money by Morgan Housel, followed by A Random Walk Down Wall Street for understanding market behavior and The Bogle Effect for an understanding of the index fund and its impact on the investment industry. Meghan also mentioned that she would provide a more detailed list of investing books on her social media profiles.
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Early Financial Education for Children
Meghan stressed the importance of teaching children about the value of money from a young age. She suggested using an allowance as a tool to help children understand the concept of earning money through work. She also highlighted the importance of teaching children about the compounding effect of saving and the potential for savings to earn more money. Meghan underscored the need to teach children about supporting those less fortunate, emphasizing the idea that even with plenty, one should value giving back. She suggested these are the crucial messages to impart to children.
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Teenagers' Financial Literacy and Higher Education Decisions
Meghan stressed the importance of teenagers understanding the financial implications of their decisions, particularly regarding higher education. She highlighted the potential for student loan debt to significantly impact their financial future and the importance of making informed choices about their education and career paths. Meghan suggested that teenagers should consider the cost-effectiveness of their chosen colleges and majors, and also urged parents to openly discuss these matters with their children.
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Housing Market Update: Stability and Normalization
Meghan provided an update on the current state of the housing market, noting that while activity has reduced due to higher interest rates and low mortgage rates from previous years, there is still demand for homes, keeping prices relatively stable. She highlighted that there are three different measures of home prices reported each month, providing insight into the market's health. Meghan also discussed the impact of seasonality on home prices and introduced the Case Shiller Index, a tool that tracks the actual value of housing stock. She concluded that despite a housing shortage, home prices are appreciating less, with home price appreciation returning to more normal levels. Meghan also reassured those present that a repeat of the 2008 housing market crash was unlikely and offered her availability live on Wednesdays to answer additional questions.
To catch all episodes of Finance Explained, be sure to visit the Finance Explained podcast home page and subscribe wherever you get your podcasts to never miss an episode. Have a question you'd like Meghan to answer on Finance Explained? Look for the question box in her Instagram stories every Tuesday night, or you can also now record a question for her to answer on the podcast. Keep your questions coming - they help all Family Finance Moms continue to build their financial literacy and make us all financially smarter!
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