As many parents know, you didn’t learn very much about finances or how to manage them. However, you did learn imaginary numbers in school during Algebra 2. This leaves it up to parents of children to teach them about good spending and saving practices. There is a plethora of information online if your child asks you a specific question that you are not quite sure of. Technology has made it irresponsible to be financially illiterate as a Google search can pull up a large portion of what anyone needs to know. Here’s some financial advice to parents to help them teach their children that can ensure future success.
Financial Advice For Parents to Teach Their Children for Future Success
Sometimes you may not know how to approach your children about finances in a way that they can understand. However, you still want to be able to pass down some worthwhile financial tips to help them out. It’s nothing worse than having to admit to your children you’re just as clueless as they are about something you’ve had time to learn. Below is some financial advice to parents that could help them with teaching their children.
Taking Classes At The Local Community College
The largest issue with a number of college graduates is that they are riddled in debt. Going to a 4-year college can cost up to $250,000 or more in some cases. Graduate school could have your child in debt for decades if combined with an expensive undergrad degree. Classes that transfer at a local community college can save thousands per summer or even during the semester with online classes.
Students that have no idea what they want to pursue might want to get into the working world for a few years. This will allow them to have a nest egg and avoid getting an expensive degree that will leave them with no options for employment. Until college expenses are reduced by government intervention, the debt that can be accrued is unbelievable.
Technology Can Be A Huge Help
Instead of having to go to an attorney to plan your estate you should look into online estate planning. These types of tools and conveniences were not around decades ago so letting your children know about them is imperative.
Different things tend to waste money in college such as:
- going out to eat during college
- spending a lot of money on a big night out
It adds thousands of dollars to your teen’s debt that could take an extra year, or two, to get out of. Sending a teen off to college with a few budgeting apps can be enough to help them curb their spending a little if not completely. Doing small things like taking a look at credit card statements online can show your teen how they should be spending.
Investing Money Instead Of Letting It Sit In A Bank Account
Growing money is something that plenty of adults do not understand now as they would rather leave their money in a savings account. The truth is that many people do this because they think the stock market or anything associated is too volatile.
There are many conservative ways to grow money such as:
- mutual funds
- dividend stocks
On the other hand, there are plenty of stocks that are too risky to be involved in. Also, crypto-currency might not be the best investment when teaching your child due to its complex nature. Property investments are also a great idea as you will be able to teach them about different aspects of this.
Sit Down With Them And Set A Budget For College Years
Setting a budget is a challenge for people that have never had to do this. Many people do not realize what percentage of their income they should be spending on things like food or rent. Too many people try to live beyond their means by putting debt onto credit cards with no interest. This becomes a huge problem once the interest-free period ends as this could lead to thousands of dollars added to the debt depending on its size.
There are going to be some things that you are going to have to modify, especially for a young professional that might not be earning copious amounts via their salary.
Small things like:
- putting money away in your 401K in your 20’s
- taking time to learn the things you might not be sure of in terms of finance
These things can allow you to retire years in advance and help you continue to educate yourself. Things change in the financial world so staying up to date with these changes is essential.
Related: How Much Should You Spend on That?
It’s Your Turn! What Will YOU Teach Your Kids?
As you can see it is up to us as parents to be able to teach your children about finances. They can learn on their own, but at a young age you can pile up debt that takes a lifetime to pay off. This financial advice to parents should help you make sure your children are ready for financial success.
What financial tips have you been able to pass down to your children?
AUTHOR LaTia Longuemire
My name is LaTia Longuemire. I enjoy writing, singing, and cooking in my spare time. My passion is helping others. At this stage in my lifetime, I'm primarily focused on my children. They are everything that keeps my world spinning.