Financially Independent Kids
Moms want what’s best for the children, but all too often, financial education is left by the wayside. In this article, Freedom Debt Relief shares tips that moms can use to help create financially independent kids.
You’re Not A Bank
One of the first steps in teaching your children to be financially independent is to show them how to earn their own money. Rather than giving them money anytime they ask, start off by making them work for it.
Young children might find it difficult to get a part-time job, especially depending on the location. However, there are plenty of tasks to do around the house. Assign some to each child and pay them an allowance based on the skill of the job, just like in real life.
Also have due dates that each job must be completed by, just like in real life. This type of work will have your children better prepared to deal with work in adulthood.
It will also teach them the value of money. Rather than being given money to go to a movie, they’re earning it. This will instill the value of money in them and maybe make them more likely to save money rather than spend it on something they don’t need.
Share Family Finances With Children
It’s a false stereotype that only the father has to handle family finances. It should instead be a team effort with both mother and father sitting down periodically to manage their finances and make sure they’re on the same page.
Freedom Debt Relief says that family finance meetings are also a great time to bring in the children and let them see how money works first hand. Depending on their age, they don’t need to know everything, but as they get older, you can introduce them to more concepts.
Allowing children to sit in on family financial discussions, watch how a checkbook is balanced, and how to handle paying bills will build life-time skills early on. This will put your children far ahead of most children at their age and more prepared for adult life.
Does Your Spouse Have Enough Insurance
Some families will do just about everything right financially but leave out one key element – insurance. If mom stays at home to take care of the kids, avoiding high day care cost, and dad is the bread winner, what happens if dad isn’t there anymore?
Not having insurance can also derail your children’s financial independence as the entire family tries to make ends meet on a largely reduced income.
This is a real consideration for any family. Loss of income will be detrimental to your family. Term insurance is cheap and can fill the income gap left by the loss of a bread winner.
Freedom Debt Relief notes that how much insurance is the next question families often ask. A common guide is 10X your income. For example, if the father is making $80K per year, insurance of $800K will replace that income for ten years.
Of course, how much insurance must be factored against how much you can afford? But trying to work in at least 10X the income and more if possible should be the goal when it comes to insurance. You don’t want to be in a situation where tragedy strikes and the pay off from insurance leaves your family struggling.