One of our most important tasks as parents is to prepare our children for an independent life in the world. This is all-encompassing, from helping them out socially and instilling them with kindness and a strong moral code to equipping them with knowledge around their careers and finances. It can be tough as whilst we want them to learn for themselves we also want to share with them the wisdom of our own experiences. One area in which we do need to guide closely is money and finance. We can role model this and then we can share with them a few key pointers to set them up to be financially independent in life.
Adding to their savings regularly
We all know that we should be adding to our savings regularly to build ourselves a safety net, set aside money for special treats and occasions and planning for our retirement. The savings habit can be started from a very early age, as soon as your child has any sort of concept of money. Encourage them to save a portion of any money they receive as gifts or pocket money and they will soon see the benefits as their savings account accrues.
Share money-saving tips
You will no doubt be brimming with these, but rather than storing them all up to tell them as your children fly the nest, be a good role model and share your wisdom regularly. From saving money on gas to meal planning and ensuring that no food is wasted, your children will probably see how you save money and budget every single week. When you feel that they are old enough and engaged enough to take the tips on board, talk them over with them as and when they arise. By the time your children do leave the family home, these will be ingrained best practices and habits that will simply be second nature to them.
Salaries and budgeting
From their very first job, help your child to understand their salary and how best to budget with it. It might be a part-time position delivering pizza initially, but before you know it they will be earning significantly more in full-time careers. Go through their income with them, set savings aside first and then work through necessary or priority spends to help them to budget and plan.
Finding their first home
This is one area that you may well get involved in as it is a huge decision and your children might seek out your advice. Whether they are looking to rent or buy, this is going to be a large financial commitment and you will want to steer them to make the best choices.
If they are renting, they can use city-specific rent reports like that one to find cheap apartments and it is worth them carrying out research on their local neighborhood. If buying, they will need to find the right property for them and arrange finance for it, so advise them to listen to the experts and to go with trusted recommendations.
What advice would you add to help your children to become financially independent?