Being a parent is not easy — it’s one of the toughest jobs in the planet. Every parent is always thinking of ways to provide the best for the kids and help them start as successful adults in life.
If you’re a parent, kudos to you-you’re doing a great job, and it’s great to appreciate yourself for the great job you’re doing.
Teaching your kids on the importance of money, saving, and financial independence can be a tricky job — not every parent knows how to do it. And those who are trying, aren’t doing enough.
Yes, thousands of parents across the globe are talking to their kids about money — especially saving and budgeting. However, just a couple of parents are delving into the area of credit card and student loan.
As an immigrant living in the United States, the United Kingdom, or in other European countries, it’s quite crucial to educate your kids on student loan debt and credit card debt. If not, you’d raise a bunch of young adults who would be financially handicapped for a significant part of their adult life.
How do you educate your kids on these critical subjects? And how do you give them quality financial education?
Here are a couple of practical tips to help you get going.
1. Teach them good spending habits
Teaching your kids good saving habits is the foundation for all financial lessons they would ever learn in their lifetime.
Let them develop the discipline of saving, and keeping aside some percentage of cash that gets into their hands.
Let them understand the importance of setting saving goals and sticking to it.
Also, delayed gratification is a great lesson to be learned at a very young age. But if they’re not young kids, you should start now and let them understand the importance of putting off pleasure until a set goal is achieved.
What’s more, to begin mentoring them on these vital financial principles, you should open a saving account for them.
Here’s the thing, it’s never too late or too early to start teaching your kids the importance of good spending and saving habits.
If you’ve got teenage kids in your home, let them have a savings account, and also invite them to be part of the family financial planning session.
2. Mentor them on the importance of good credit card history
Here’s the thing, a time would come when your kid will apply for a home mortgage or auto loan. Good understanding of credits and credit cards would come in handy during these periods.
Let them understand the importance of paying off their credit cards each month. Not paying off the credit card won’t pave the way for financial independence — it’s a slippery slope that compounds and also lowers your credit score.
3. Show them how to eliminate debts
Debts can quickly pile up if not adequately tracked.
From the beginning, you should teach them how to track debts, identify interest rates, and come up with an ideal monthly payment plan.
As a parent, one of the best gifts for your children is the mentorship and guidance you offer to help them become financially independent adults.
What financial lessons are you teaching your kids today?