Financial Planning: Prepare Your Kids for a Secure Future
Parents don’t need to invest in a trust fund for their kids to ensure their future financial security. As a parent, you should focus on giving your children the tools to make their own money, and show them the best ways to manage it. Here are some steps to help your kids with their own financial planning.
Give your Child an Allowance
When we think about having children, parents focus a lot on the costs. We think about how much we should be saving for a baby. But an important thing parents can do to help their kids as they grow is to be open with them about money. This can start at an early age when they ask for toys and candy.
If the money isn’t there, you need to communicate the importance of staying within the family budget. You can show them how to earn their own money by giving a child an allowance for doing chores around the home. When they learn the value of working for things they want, kids usually don’t spend as much as they would if you just gave them money. They’re learning financial planning by having to save for the toys or games they want by doing this.
Teach Them How to Save for Big Events and Purchases
Kids don’t stay young forever, and they are going to have big events in their life. When they get their driver’s license, they’ll want to get their own car. After high school, they may attend college.
A wedding is another monumental occasion in a person’s life. If your child is paying for the celebration, they may want to make the event special with personalized wedding napkins, a scenic venue and fashionable wedding attire.
Buying a home is another huge purchase your child may make some day. These all take a lot of financial planning on their part.
You need to teach them to save money. Kids aren’t born savers! When they are little, you can help them make a budget with some saving money and some spending money. You should also teach them to be charitable givers. We’re blessed to be a blessing.
When they are older and getting a regular paycheck, help them set a more detailed budget for their expenses. Money left over can be placed in a savings account for the future. As the money begins to build, you can teach them to invest their money. They might want to invest in a money market account where they will get a higher rate of interest.
Show Them the Value of Getting a Job
Children can do chores at home to earn money. If they are too young for a “real” job, they might be able to mow the lawn for friends and neighbors, shovel snow, or babysit.
When they’re old enough to get a job, you can show them the importance of having one. Going to work teaches your kids responsibility by being punctual. They’ll also learn how to follow rules set by employers and working hard in exchange for money.
Once your kids see how much is left in their check after taxes, they may not be so quick to spend money on expensive coffee, fast food, or expensive clothes. Encourage your teen to find a job that they like. Depending on where they work, they might learn skills they’ll use in future jobs.
Help Your Child Open a Checking and Savings Account
Knowledge is power, and you can give your child a chance at a better life by teaching them about banking. Technology has taken managing your bank account to a whole new level. We rarely write checks anymore, so you need to teach your kids to pay bills online. Help them open a checking and savings account, and teach them how to manage those accounts. You do need to teach them to write a check if they haven’t learned that in school. Also, teach them the repercussions of bounced checks and insufficient funds. Show them how to download mobile banking apps to keep tabs on their accounts through their smartphone or tablet.
As a child, you may not have been taught much about financial planning. With today’s latest technology, you can teach your child valuable money lessons that they can use to boost their financial future.