Teaching children how to be financial independence can be a difficult task, especially since many adults don’t even feel that they are themselves.
However, children can benefit from their parent’s mistakes when there are good intentions and a commitment to learning involved.
While people may, in general, gravitate toward an instant gratification type of behavior, it’s possible to teach children the value of saving, delayed gratification, and future rewards.
Stress the importance of good credit.
When it’s time for your child to take out a loan, whether it’s for education, a car, or a house, they will want to have the advantage of a good credit rating.
While the bank may lean on you as a cosigner, as they build up their credit over the years, they will get closer to taking on the loan themselves, making them more responsible and invested in their present and future.
As early as you’re able to, start allowing them to watch you pay bills and explain what they are for, as well as your explanations as to why you are holding off on a certain commodity. This way, they will be able to become financial independence, and hands-on, with what it means to be in control of money instead of the other way around.
Teach the value of comparison shopping.
It might be the weekly groceries, a television, cell phone, or vehicle, whatever the item; it is available at different prices from different vendors.
Walk your child through the process of checking out sticker prices at one store and then another, talking about why those differences are there. Ask questions like: Is this item worth this price? Is it worth more if I can get it sooner? Is it a final sale? (and what that means).
Teach them about the importance of good insurance.
What children might have a hard time relating to is that insurance is preparing for a rainy day that may never come. It’s also the law – with regards to houses and vehicles – and their first experience with it is likely to be their own car insurance.
Once they have their driver’s license, help them research the best affordable car insurance to help them stay safe, and to secure their own peace of mind. They will need insurance for life, thus educating them in making a good decisions will pay, literally, for many years to come.
Show by example: Live within your means.
Yes, it’d be great to own a hot Corvette or buy the newest, greatest iPhone. But sometimes, the things we want are not within the budget.
Talk to your child about how the emotion behind desiring something is perfectly natural, but actually saving for it, and ultimately giving yourself the time to decide if you want it or not, is the most gratifying and prudent approach.
Assist them in learning a trade or marketable skill.
When you encourage your child to learn a useful skill, it’s one of the best ways to promote financial independence. The world is (and has been) heading in a design, creative, and technology direction, with no signs of slowing down.
Computer programming and coding may be one of the best areas to get into, and right off the bat they will gain confidence and secure their financial future.
Promote the spirit of leadership within them.
It is estimated that nearly half the population is introverted, so it stands to reason that your child might be, too. However, that does not mean that they can’t learn and exhibit leadership skills, which will help set the stage for financial independence.
Leadership skills include being proactive, having empathy, having vision and creativity, being a good public speaker, and taking responsibility for their actions.
Teach them to thrive, instead of just survive.
For too many people in the world, life is about going to a job they dislike, and merely getting through the day. Innovation and inspiration, however, come from those people who are willing to follow their dreams and work toward accumulating wealth, instead of working to make ends meet.
Teaching children that it’s okay to accumulate wealth and to work toward enjoying each and every day will help them become innovators, self-sufficient, and even philanthropists.
The importance of positive personal branding.
While it certainly isn’t every child’s goal to have an online presence, it might happen with or without their input. Help your child see that the face they put out to the world over social media is the one that will shadow them through their personal and professional lives.
Help them make positive choices and to steer away from embarrassing mistakes. Kids are sponges and are ready to learn. As a parent, the best thing you can do is to ready them for future financial independence.
With a little bit of planning, preparation, and stick-to-itiveness, your child can grow up making responsible choices that will keep him or her ability to withstand hard times and emerge gracefully on top.