Let’s financially socialize while social distancing

We find ourselves in unprecedented times. Many of us are scared; there are so many things beyond our control. During these times I hope you remain safe.

I, too, feel so many things out of my control and find that focusing on those things I can control is keeping me sane. I want to provide you with a few exercises for your family to help you to lean into each other and build a stronger financial and emotional connection while social distancing from others.

Social distancing is a new phrase to most of our lexicons, so I want to add another, financial socialization. 

Financial socialization is the process by which young people acquire the standards, values, norms, skills, knowledge and attitudes needed to become functioning consumers in the marketplace. Financial socialization is the way most people learn how to handle their financial affairs — good or bad. Positive financial socialization leads to financial wellness, financial wellness leads to personal wellness including less stress coupled with greater happiness and contentment.

We all want less stress. Here are four ways to financially socialize with your family:

Read relevant books

Everyone in your household should read a personal finance book and discuss what they have learned. Here are a few age-based recommendations:

• Adults: “The Soul of Money”

• Teenagers and up: “The Richest Man in Babylon”

• Middle school: “How To Turn $100 Into $1,000,000”

• Elementary school: “The Bernstein Bears Trouble with Money”

Know your starting point

Have everyone in your household develop a Personal Balance Sheet — whether it’s pennies from a piggy bank for younger children, savings accounts for young adults, or 401k and investment accounts for parents.

To create your personal balance sheet you will list all your assets and all liabilities. Assets are things that you own that have value, while liabilities are debts that you owe. Your assets minus your liabilities equal your net worth. Review how much of your money, each month, is going toward your assets and how much is going toward your liabilities. 

Give every dollar a purpose with goal setting

Now that you know your starting point, knowing where you want to go will enable you to ask for direction and remain accountable. After reviewing each of your personal balance sheets, set some goals as to how you would like these to change. Have each member of your household write down savings goals, spending goals, sharing goals and investing goals. Go through each person and ask Why are they saving? What will they save? How will they save? Write each goal down. Give every dollar you have a purpose to either save, spend, share or invest.

For parents and older children, create a mint.com or YNAB.com account in order to track these goals. This is a great opportunity to sit down with high school seniors and college-aged children to discuss their spending habits while at school; review and correct any issues you have seen; and discuss the best ways to track spending and cash flow during the semester.

For young children, you can have fun crafting by creating “Save, Spend and Share buckets” so they can visually see their assets and give them each a purpose with goal setting. Simply have them revisit their goals and progress each month.

Develop a family mission statement

Having a family mission statement helps you and your family live and spend with purpose. It clarifies and documents a set of values and beliefs that can help guide your family to make choices that align with those values. Think of it as the lens through which decisions are made. As it comes to financial decisions, a family mission statement helps to guide financial planning decisions, while creating unity and prosperity within a family.

The books I listed are available on Amazon.com, along with my new book “Money Minded Families: How to Raise Financially Well Children,” which is available for pre-order on Amazon.com. Other resources such as the Save, Spend and Share banks and the Family Mission Statement instructions can be found online at moneymindedfamilies.org/resources.

I hope you have fun fnancially socializing!

Stephanie Mackara is a Daniel Island resident and Wealth Advisor at Charleston Investment Advisors. You can reach her at  smackara@charlestonia.com.

Daniel Island Publishing

225 Seven Farms Drive
Unit 108
Daniel Island, SC 29492 

Office Number: 843-856-1999
Fax Number: 843-856-8555


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