Todays guest is is about preparing our kids for financial independence..
When you have a new-born baby, it’s like time stands still. When your sleep comes in two-hour naps at random intervals and your nights are spent rocking and making shushing noises, it’s hard to keep track of the passing days, let alone think ahead to 2031.
But as hard as it is to imagine, they will be 18 one day. Legally, they’ll be adults, ready to fly the nest and make their own way in the big wide world. Will they be ready for it?
We all know they’ll have thousands of other influences between now and then, so there’s only so much you can do as a parent. So, helping you make the most of your influence, we present five ‘top tips’ from financial services provider All About Money
1) Let them earn!
It’s basic human psychology: you respect what you’ve earned. If they’re handed everything on a plate, your kids are simply less likely to look after their belongings. So let them earn their pocket money. Let them help out with the housework. And if they’ve broken a toy by being careless, let them do without (at least for a while).
2) Teach them to budget
However they get ‘paid’, your kids need to appreciate money, rather than splashing it all at once. You’ll be doing them a real service if you get them in the habit of dividing it up, so there’s a bit for sweeties, a bit for impulse purchases – and a bit put to one side.
If you let them save up for those expensive treats, you could even sweeten the deal by offering to match what they save. It’s a bit like your employer might contribute to your pension pot when you do, so it’s a good way to prepare them for one of the more positive aspects of adult life.
3) Teach them to cook
Lasagne,pies, cheese platters… with the right ingredients, most of us could lay on a decent spread – but could you do it on a tight budget?
The ability to turn leftovers and pasta into a tasty meal has helped many a family cope with financially tough times without going hungry or resorting to beans five times a week.
4) Practise what you preach
Kids aren’t the only ones with a wish-list. If there’s something you’re eager to buy, you could turn it into a learning experience for your offspring by letting them see you save up. Once you’ve shared the excitement of approaching your goal, they’ll see how much you enjoy the big day when it arrives – and how carefully you treat your treat once it’s in your possession.
5) Admit when you’re wrong
On a similar note, admit when you’re wrong! Kids can learn a lot when they realise their parents are regretting an impulse buy or fretting about the interest they’re paying on their credit card.
18 years and counting down…
It isn’t easy to think so far ahead when you’re cuddling your new-born infant, but one day they’ll be striking out on their own.
In the many years that separate that day from this, your children will learn countless lessons from you about money management (both good and bad), often without you even realising.
No-one gets it right every time, but preparing your kids for the financial realities of life is one of the biggest responsibilities parents bear – and it’s never too early to start thinking about it.