You’re raising a family, trying to carve a space in the world for you and your brood. Everyone knows that being a good parent means taking care of your child’s physical and mental welfare. But did you know that you should also be trying to secure your child’s financial future?
Now, let’s talk about what this means.
You don’t need to be rich or able to gift Jr. with a trust fund. Simply having cash in the bank isn’t nearly enough to guarantee a strong financial position. Ask any NBA or NFL player who went broke after retiring.
If you want to set your child up for success, team them how to be financially literate. They should understand how to do their taxes, how to set up a retirement account, what it means to go into debt. Knowledge truly is power in this case.
Here are a few more tips.
Give an Allowance
Your child might not be old enough to legally get a job.
If they want money in their pocket, it’s coming from you or they’re stealing it. Obviously, you don’t want the latter to occur. Teaching your kids not to steal is parenting 101. Giving them an allowance is a healthy way to let them learn about the value of money.
Instead of simply handing over the cash, make your child’s allowance contingent on something. Make them do chores or get grades to earn money.
Understand Your Accounts
Find an attorney near you and get a clear picture of your own financial situation. In addition to creating a will, you also need to ensure that your current finances are doing well. In modern times, it’s not unusual to have multiple sources of income.
Perhaps you won a lawsuit that gifted you with settlement money. Perhaps your own parents left you a nest egg. Whatever the case may be, you should have a good grasp on how much you have and how much you expect to go to your children.
Never squash a child’s curiosity.
If they have questions about the future, answer them. When those questions relate to financial security, you should be especially open. Some parents feel embarrassed to speak to their kids about money. They don’t like to admit that they can’t afford anything.
This leads to your children developing a warped sense of money. They won’t be able to understand where money comes from.
Teach the value of saving money early. It’s an important lesson no matter how much you have. Your child can start saving their own money.
When they’re really little, you can control their savings themselves. As they get older and gain control of their own money, you should begin to encourage them to start saving on their own.
A savings account that’s opened when your child is a baby can eventually grow into a sizeable nest egg. Even if your child decides not to go to college, they can still use a financial boost.
Your kids will try to model you in many areas of life.
If you demonstrate the value of a strong work ethic, your kids will imbibe the same views. It’s impossible to have a sound financial future without working hard.
Even if you’re born into money, you likely will have to do something to support yourself at some point.
Teach your kids that you’re working for more than just a paycheck. Regular work is good or your mental health as well. If you’re too focused on the paycheck, you may be tempted to accept a job where you’re not treated well.
Budgeting is such a useful skill it should be taught in school. Every single person should learn how to balance a checkbook.
It doesn’t matter that people rarely use paper checks now. The concept is still the same. Kids should know how to keep track of what they’re earning and what they’re spending. There are apps you can use to make this easier.
Kids today are bombarded by outside influences.
They’re on their phones, they’re online, they’re joining groups. Advertising is pervasive. A lot of their views about money will come from society. There’s no way to avoid this. However, that doesn’t negate the strong influence exerted at home. Ultimately, you play the biggest role in your child’s life until they become an adult.
Speaking with your child about money won’t be fun, but it will ultimately yield satisfaction.