The world our children are growing up is not the same world as we grew up in. This is not always a bad thing; we just have to help guide them to make good financial decisions and other life choices to help them be as successful as possible. When trying to train our children, there are several financial tips that will help them when they grow up. Here are a few:
5 Financial Tips for Our Millennial Children
1. Pay Down Debt As Soon As Possible
Teaching your children the freedom you feel when debt is paid off is one of the best gifts you could ever give them. If you are currently trying to pay off debt, keep them involved in the process and let them celebrate with you as different things are checked off of your list.
Helping learn this important life goal will help them have more freedom to do what they want to do in life instead of always owing money to a credit card company or bank.
2. Start Saving For Retirement
When your child is 18 years old, the last thing they are thinking about is their retirement years. In fact, all they can think about is getting through college to start their future career or dream job.
Teach them to put aside a portion of their pay every month into IRS’s and investment accounts. Discuss with them how compound interest works so they can see how money grows over time. The earlier they start the earlier they will reach their financial goals.
3. Choose Low Interest Loans
When obtaining a credit card or student loan, encourage them to take the option with the lowest possible interest rate in order to save the most amount of money.
People don't realize how much they throw down the drain on high interest rates to lending companies. The lower the interest rate, the better off you will be if you are having to take out a loan at all.
A great example you can give your kids is taking out a private student loan. These loans are personally guaranteed by the borrower which means they have to pay it back or severely damage their credit.
To ensure they are able to pay the loan back, it’s essential that they get a low interest rate. These low interest rates come from good credit history and can be refinanced later on to lower the interest rate.
4. Prepare For Emergencies
An important life lesson to teach your children is to always be aware of their surroundings and prepared for anything life throws at them.
This means physically, emotionally as well as financially. Having an emergency fund will come in handy when your tire blows on the interstate or you drop your cell phone and the screen shatters. Life happens and you need to help them be as prepared as possible to handle these various situations.
Making it a hurdle for accessing the money might be beneficial to keep them from spending it on the newest gadget or romper they just had to have at the department store.
5. Don't Be Afraid To Talk About Money
This goes for parents to children as well as your child to their future spouse. When getting married, you need to be on the same page as your spouse financially so you can achieve your goals together.
As parents to children, don't be afraid to talk about money in front of them, as long as you speak in a positive manner about it. They don't need to know if you are struggling, necessarily, but they do need to know that making money decisions is a group effort and it is okay to talk about.
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2 comments
Yes, very good tips, No. 2 especially. I know, cos I'm one...and there is wisdom in the age-old English proverb, "Neither a lender nor a borrower be!"
ReplyDeleteGreat tips, your posts are always so interesting!
ReplyDeleteKisses, Paola.
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