From a young age I would help translate things for some family members for anything from documents that needed to be filled out to customer service calls that needed to be made. There was never a conversation however about what a 401(k) was or how investing from an early age could set you up for financial success. How can anyone in my family teach me something they never learned themselves? They came here from the Dominican Republic, and they definitely did not have financial education conversations growing up there. 

So here we are. I am still trying to wrap my head around financial lessons and as I learn, so will my children. According to Next Gen Personal Finance (NGPF), in 2020 there were 8 states that guaranteed a personal finance class for high school students. In 2024 there are now 25 states that will be offering a personal finance class to high school students. Don’t even get me started on why ALL states are not ensuring a financial education to our kids, but we won’t go there. I personally would not depend on the schools to teach my kids about money management. I plan on just teaching them whatever I learn along the way.

Financial lessons can be taught at a very young age. You can teach young children how to sort coins and bills, so they learn how to identify it early.  You can also create a pretend store or a pretend restaurant in your living room. Put price tags on items in your home and give your little ones pretend money that they can use to purchase the items. This also introduces the concept of add and subtract when you give them change back for their purchase. 

You can give slightly older children a small allowance and teach them how to budget their money. Show them how to categorize their money to include spending, saving and sharing. When spending they can learn about needs versus wants and to keep that in mind when managing their money. Give everyday examples and let them decide whether it is a need or a want. Younger children can save their money in a piggy bank or a clear jar where they can visibly see their money growing. Open up a bank account with older children where they can learn online banking and concepts like interest and fees. The lesson of sharing is also an important financial lesson. Giving to others helps build character and compassion in our children. It does not even have to be monetary. It can be as simple as donating clothes or toys to less fortunate children or even acts of kindness is sharing. They can learn to let go of material possessions and give to people in need. When giving to others, there is a sense of happiness that comes with it. Make sure to celebrate their kindness. 

Introduce the concept of goal setting to our children. Show them the difference between a short-term goal and a long-term goal. A short-term goal could be a toy or some electronic device that they may want. An example of a long-term goal could include saving for their first car. Whatever the goal may be, we can teach them that it can be attainable with some financial planning.

Budgeting is another concept that is an important lesson for money management. This can be taught with play money or even interactive online games.  They can learn about the money that comes in versus the money that goes out, income versus expenses. Make sure to show them how to track and review their budget regularly. Make sure to adjust when needed because life is unpredictable. When a new want comes up, have them review their budget and decide if that want is worth it. You can involve the whole family in the lesson. If you are planning a family trip, maybe include your children in your budget planning. They can even contribute to the budget if possible. This can be something as easy as skipping on a toy purchase, so that the money saved will be added to the family trip budget.

Teaching money management at a young age helps kids think more critically and make more informed choices when dealing with money. These good habits create a strong foundation that will be carried over to adulthood. Financial knowledge that is gained as a child will set them up for financial success in the future. By the time they get to the real world and need to start making their own decisions they will be financial management superheroes! 

I will leave you with some actionable strategies to help you when teaching children financial education.

1. Budgeting: You can give children a small allowance and teach them to categorize it into spending, saving and sharing. You can create a chart where they can track their progress or open a bank account with older kids where they will track it through online banking. 

2. Stories: Read them stories that have characters learning financial concepts. You can use storytelling as a tool for teaching in a relatable, engaging way. 

3. Games: Play games that incorporate money lessons in them. Monopoly is a game everyone may know about, but I purchased ‘The Entrepreneur Game’ from Amazon. It is probably better for older kids, but it teaches lessons in investment, marketing, branding, negotiating, communicating and decision-making. I even learned a few things playing this game. 

4. Real-life Experiences: Involve children in a trip to the grocery store. Start by planning with a list of items and a budget in mind. When at the grocery store let them help you find the items. Show them price comparison and the differences between brands and their quality. Sometimes it is better to get the store brand, but at times the quality is not there, and you end up purchasing more of it. 

5. Sharing/Giving-back: Encourage children to give to someone in need. It can be monetary, or they can donate their material possessions. They can also give with acts of kindness. 

Creating good financial habits early on establishes financial literacy skills that they will carry to adulthood. They will have a positive money mindset shaping their beliefs about money. If you read my blog about money mindset, you know that a positive mindset is important. If you have not, click on the following link to help guide you to a positive money mindset Financial Roadblocks: Overcoming Limiting Beliefs.

Children will establish accountability of their financial choices and understand the consequences of their actions. It empowers them to become financially independent and build financial confidence. 

Budgeting has a bad rep but it’s actually a powerful tool that can help you take control of your finances. It allows you to gain a clear understanding of your financial situation, empowering you to make more informed decisions and achieve your financial goals. 

Tracking your income and expenses gives you financial awareness. When you have financial awareness, you think twice when you are scrolling on social media, and you see an Amazon find that you don’t really need but have to have! Creating a budget will allow you to reach short-term goals like paying off credit cards or a much-needed vacation. With a little patience, it can also help you achieve long term goals, like a downpayment for a home or saving for retirement. When you start to track your expenses, you can even find some recurring charges you may not know you were paying for, like an Apple subscription you don’t use or paying way more for your SiriusXM subscription because your promo ended. Yes, that last example happened to me. I would have never reached out to them to lower my price if I didn’t begin to track all of my expenses. 

Some may think of budgeting as a tool that tells them what they can and can’t spend money on. Instead of looking at budgeting as something that is limiting, you should see it as the financial plan to help you reach your financial goals.

Everyone is different and you can’t be expected to copy someone else’s budgeting tactics and apply it to your life. There are different ways to create a budget that will fit your style. The best budget style is the one that keeps you making progress and sticking to your financial journey.

Traditional budgeting involves tracking your income versus your expenses within a specific time period. You allocate funds to specific categories depending on your priorities and your financial plans. You can use historical data to determine how much money to allocate to each category.  Make sure to track your actual spending and compare it to the planned spending to help identify any discrepancies and allow yourself to make any changes needed to stay within your budget. This is probably the type of budgeting most of you may know about. This is definitely the system that I always used in the past. When I used this system, it was reliable and did the job, but I never remained consistent. The disadvantages of the traditional system are that it is rigid and inflexible which does not work for everyone. 

Zero-based budgeting is reaching your goals by giving a job to every dollar until you reach zero. This does not mean that you need to spend every dollar you make, it just means that you know where all of your money will go. This allows for a more personalized system that is based on your current needs and not historical trends. When you get paid, you give every dollar a purpose until you reach zero.  There is a lot of preparation with zero-based budgeting, and you need to revisit and revise your budget based on your income, wants and needs. Every purchase you make should fall within the guidelines that you set for yourself. Once you spend all of the money for a certain category, you are forced to stop spending. Some disadvantages of this system is that it is very time consuming to maintain consistency and it is challenging to assign a job for every dollar for variable expenses. 

Envelope based budgeting, also known on TikTok as cash stuffing is a system where you keep track of your income through cash in envelopes. Each envelope has a specific category that you will fill with cash and once that cash runs out, you no longer can spend on that category. If there is money left over in your envelopes, you can reallocate the cash to other categories. Some people only use this method for their variable expenses and continue to pay their fixed expenses through the bank. Some do however use this system to budget all of their income. A benefit of cash stuffing would be that you would not overdraw money from the bank avoiding any fees. Since you are dealing with cash you are physically prevented from going over budget. There is no risk of mindless swiping since you are paying for everything with cash. There is also a different mindset when paying with cash because you physically have the money in your hand causing you to think twice before making a purchase. Some of the disadvantages are the frequent trips to the bank or ATM machines. Carrying cash also makes you vulnerable to loss or theft. We live in a digital age and some places don't take cash, especially after Covid. You will run the risk of walking into a place that you can’t do business with. Having cash can make it challenging when making purchases online. I guess that would be a pro and a con. If you have to go to the bank and make a deposit in order to make the purchase, you may think twice about it.  There are online cash stuffing envelopes available that eliminate using cash all together making it convenient to use this system. That’s a little confusing to me since the whole point is using cash...but hey I am all for it if this method works for you!  

Value-based budgeting entails providing justification for all of your expenses. It helps you spend your money only on the things that matter. Over time your spending will align with your values. This can include anything from traveling to saving for family experiences. You may want to spend your money on something as personal as self-care if that is what's important to you. You don’t have to cut out everything in your life to be good with money. First you need to understand what your values and priorities are. I actually started to try this method for myself. I would say at this moment in my life I value freedom. So I am trying to make sure that what I am spending on aligns with what I value in life…although it is so hard to ignore when I get an email about a sale. Sure, you shouldn’t be so strict and I’m not that bad. I just need to realize that as much as I love that new skirt from Zara, it does not help me reach financial freedom. 

Whether you are inspired by the ease of using only cash or you would rather budget your money based on your values, create a budget that can be sustainable for your unique needs. 

I want to leave you with some actionable steps that will help you with your journey towards financial empowerment. 

1. Explore: Look into the different systems we have discussed. Consider the pros and cons of each system and what would be compatible with your lifestyle and financial goals.

2. Experiment: Feel free to try different ones to see which one may resonate with you the most. It is not about being perfect, it’s about working with a system that helps you progress.

3. Commit: Once you find a system that works for you, be consistent and commit to working towards your financial goals. 

4. Be Flexible: Life is full of expected twists and turns so understand that you may need to adapt your budget to these changes. Flexibility allows you to stay resilient and keep your eye on your financial prize!

Budgeting is not just about tracking and managing your money, but it can also help you take control of your financial future and build the life that you deserve.

“There is NEVER enough money to take care of the things that I need to do, much less the things I want to do!” 

“If I invest in the business that I always wanted to start, there may be a chance that I fail and I lose my hard-earned money.”

Have you ever said any of these statements in the past? As a first-generation Latina from a low-income home, I definitely said this and more! Limiting beliefs are thoughts or ideas that you may have that hold you back from something that you want. When you harbor negative beliefs about money, you create a barrier that prevents it from flowing into your life. Do you avoid looking at your bank account because you are scared of what you may see after you come back from vacation? YOLO! Maybe you feel like what you are earning now is probably the most you will ever earn.

More often than not, limiting beliefs about money start when you’re a kid. Some people grew up in homes listening to good conversations surrounding money, I wasn’t one of them. I grew up in a home with a single mom doing all she can, and the only conversation that I heard about money was her figuring out a way to make next month's rent. My childhood experience with money was scarce and of course I held on to that scarcity mindset as an adult. I thought that the only way to make money was to work really hard, not allowing the money to flow towards me in any other manner. I grew up with a fixed mindset feeling as if my financial situation was set and there was nothing that I could do to change it. Not anymore! I am working on letting go of any limiting beliefs that do not help feed my growth mindset. I will not let a financial setback define me. I will fail forward and take any lessons that come along with it.

You have to figure out what your feelings about money are. I knew that I deserved to have what people with money have and you do too! By figuring out your limiting beliefs about money, you can find out what is holding you back from having what I know you can achieve.

Once you figure out what your limiting beliefs are, find out why you have these beliefs. Do you have data-based facts that help support these thoughts or are you just assuming from what you have been told in the past? If you can’t find a reason to make your statement true, then start telling yourself statements that contradict the negative thoughts. It’s not that you are not good with money, but that you are just not experienced with money…YET. Go online or to your local library and educate yourself so that you start to learn to be good with money. There are so many free resources out there that can help you figure out money management.

Limit your time with anything or anyone that brings in negative vibes. You need positive energy around you in order to change the limiting beliefs that block you. Your subconscious mind absorbs these negative ideas and they become your beliefs. You then tend to make bad decisions from these beliefs. Treat yourself with kindness when something does not go as planned. When you fail there is a valuable lesson and growth that comes from it.

Create a financial plan and take intentional, consistent steps towards your financial future. Set achievable financial goals that are broken down into smaller, manageable steps. Make sure to address any financial challenges along the way. Avoiding them could only get you into more trouble. Remember to celebrate any wins, even the small ones!  Be grateful for any progress that you make along the way.

I wanted to add a few journal prompts that helped me figure out some of my beliefs surrounding money. Use these example prompts to help guide you on what your beliefs about money are. Some of your answers may surprise you.

1. What was the first experience that I remember about money?

2. How do I feel when I think about money? Does it make me anxious or stressed?

3. What worries or fears do I have about money? Why is that? 

4. Do I feel comfortable talking about money to others? 

5. What do I believe is the relationship between hard work and financial success?

6. What role does societal or cultural expectations play in my beliefs about money?

7. Have any of my financial challenges or setbacks played a role in my beliefs about money?

8. What do I believe about my ability to manage money?

9. What are my thoughts about wealthy people?

10. What is my belief on the relationship between money and happiness?

In order to develop a growth mindset, you need to be open, resilient and you need to continue to learn. You are not going to just wake up one day and all your limiting beliefs are gone. It will be an ongoing process that will teach you things about yourself along the way. The more you work on it, you will reshape your mind about money and allow for new opportunities in your future.

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