Teaching kids financial literacy? Try to speak their language

Maconomics founder and Yahoo Finance contributor Ross Mac joins Wealth! to give insight into the best ways parents can teach financial literacy to their children and pass the skill down to future generations. Financial literacy is becoming increasingly imperative for building and maintaining wealth as Millennials are set to inherit upwards of $84 trillion in the next several decades as part of the Great Wealth Transfer.

Mac believes a great way to teach kids about financial literacy is to just have a conversation with them in a language they may understand:

"I love talking to them, saying how much groceries actually cost, and let's talk about allowance. Let's talk about, 'hey, this toy is amazing, but did you know this is how much it cost?' And more importantly, when my kids were saying all I want to do is go on YouTube, well, now we're talking about how do we actually own YouTube? And so now we're talking about investing and we're talking about different stocks.

"And so I think it's important that we talk to our kids and put things in their own language, right? You want to equate the world around them to kind of great money practices," Mac explains.

Catch more of Ross Mac on Yahoo Finance through his newest podcast, Financial Freestyle with Ross Mac.

For more expert insight and the latest market action, click here to watch this full episode of Wealth!

This post was written by Nicholas Jacobino

Video Transcript

Well, financial literacy as we were discussing isn't just a classroom problem.

It's also a challenge for parents.

Parents are taking it up on themselves to teach their kids about managing money budgeting and saving.

So what's the best practice to teach your kids about finances here to weigh in is Yahoo finance contributor, Ross Mac, a man that owns at least one car that he teaches his kids, all of these financial literacy tools and, and equips them for the future as well.

So Ross take us into where these conversations could start.

I echo everything Sharon said.

Right?

I think it's very important that we as a community understand that financial literacy is its own language.

Therefore, the earlier we learn how to speak it, our family and our kids will have a much higher likelihood of being fluent in that language.

And that's why I love what you said, like I talk to my kids about finance every morning and I think that one thing you gotta understand is our kids are gonna learn things, they're empty sponge, right?

They're soaking up everything in the world around them.

And so they're gonna learn things good and bad just through osmosis just by being, you know, just being around it all the time.

And so when we're talking about finance, the good thing is if you're showing them good money practices, well, guess what they're gonna now inherit that as well.

And so if, unfortunately, if you're bad with money, your kids will also inherit that as well.

And so I love talking to my kids about, you know, the economy around us.

I love talking to talking to them saying how, how much groceries actually costs and let's talk about allowance.

Let's talk about, hey, this toy is amazing.

But did you know uh this is how much it costs.

And more importantly, when my kids were saying, all I want to do is go on youtube.

Well, now we're talking about how do we actually own youtube.

And so now we're talking about investing and we're talking about different stocks.

And so I think it's important that we talk to our kids and put things in their own language, right?

You want to equate the world around them to kind of great money practices.

And so when we're talking about, hey, these are the apparel brands that you're wearing, right?

We won't necessarily say their names, but this is, you have the ability to own this or this social media platform, you have the ability to own this.

And I think when you're talking to them early on, that's something that I find to be very important and that's why I have a new book.

Right.

See, right behind me, it's called the ABC S of Future Millionaires.

And what I love about it is we're putting things in a very easily digestible manner, right?

So when we're talking a as SB for bank E economy, a FICO score, not only are we gonna say what it is, we're gonna have amazing illustrations, but we're also gonna say what a FICO score is in a language that the kids can understand.

It's a report card for how well you're gonna pay back the money that you borrow, right?

E for economy, the way people in this, in a place make and spend money like buying toys or selling lemonade.

And so when you're putting things in a more practical, easily digestible manner, it gives kids the ability to start learning great money practices that they will eventually be great when they start making their own money.

And you know, because when you think about the statistics, the average person don't have the $1000 saved.

And so it starts at home.

Yeah, Ross Mac, thanks so much for taking the time.

Congratulations on the new book and everyone viewers out there, you can be sure to watch Ross's podcast Financial freestyle, check it out on streaming platforms and Yahoo Finance's home page new episodes every Monday 12 p.m. Eastern time.