Wealth Planning Should Start With Your Kids
Wealth Planning for the next generation can begin by teaching kids about money and it is an important life lesson that all children and teens should learn. More individuals today get into financial trouble early in their young adult years. There are many credit card companies and high interest charging financial lenders that set out to deliberately target young college-aged students by enticing them to take out expensive loans and to open numerous credit cards.
What Happens When Parents Fail in Teaching Their Kids About Money Matters
This type of easy money can backfire rapidly. Young people today are more prone to getting into this sort of financial trouble than young individuals just a generation or two ago. With the rise of buying on credit and more younger individuals living far above their means, more young people today are buried in debt from costly and high-interest student loan obligations, higher cost-of-living expenses and staggeringly high credit card payments sometimes before they hit age 25.
Incorporate Teaching About Money Into Your Child’s Everyday Routine
Wealth planning experts highly recommend that parents begin teaching their kids about money and financial planning early in life. It is not hard to incorporate valuable teaching about money and finances into your child’s everyday routine. The lessons should be in alignment with their age and understanding level.
Make money management and teaching fun to spur interest and encourage better Toddlers and preschool-aged children can play with pretend money when playing make-believe store or bank games. Parents should lead by example regarding money management skills. Involve kids more during grocery shopping, when setting budgets and while saving for something special.
Instead of a Set Allowance, Pay Your Child for Chores Completed Around the House
As a parent, don’t make the mistake of giving your children a set amount of money as an allowance. Instead, teach your child that money is something that is earned by paying the child for completed chores around the house. Another crucial element in teaching kids about the value of money is to be more transparent about the actual costs of items. This type of incentive pay for work the kids complete teaches them about the value of hard work and saving as well.
Creative Ways to Teach Your Kids How to Save Money for Something Desired
Get your children involved in the planning for a future family trip, dinner out or some type of family entertainment by teaching your kids how to save money for something that they desire. Instead of the traditional piggy bank, keep the money stored in a clear glass or plastic bottle that will better show how much the child or family is saving every day or week.
Encourage your children to be actively involved in planning for something the whole family can enjoy. Kids should learn that money does not grow on trees or magically appears when needed like children might think it does regarding a parents purse or wallet. For added incentive, make up games or funny ways to save by charging a dime or quarter for any bad behavior like getting sassy, neglecting to empty pockets of clothes thrown in the wash and other creative games.
Parents should take active steps to teach kids about money throughout their childhood and teenage years. This is an essential life lesson that can keep young people grounded and on track for achieving their goals throughout their lifetimes and will make wealth planning later in life much easier.