You’ve spent a lot of time thinking about your debt and finances, but have you stopped to think about the best ways to set your kids up for financial success?
How Can I Secure My Kids Financial Future?
I applaud you for stopping to read this article! If you care enough about your kid’s financial future to click on this link, then you are already way ahead of most parents.
So many people work really hard at paying off debt, saving money, or managing their finances. But not many of them stop to think about what they can do to set their kids up for financial success.
Kids learn a lot from our behaviors and unfortunately, they learn one hundred percent of their money habits from their parents.
They don’t teach finances or budgeting in schools. So it’s up to you Mom and Dad to set them up for financial success in their future.
Believe it or not, it’s really not that hard to set your kids up for financial success. There are several really easy things you can do throughout their lives that will guarantee you raise kids who are financially responsible.
Planning your Child’s Financial Future
Start early! The best thing you can do for your kids is starting to think about their own finances from the minute they are born.
Not only can you open bank accounts and save money for them, but you can also teach them throughout their little lives the value of money. From earning it to saving it to spending it.
Everything is a lesson when it comes to finances and kids. And you are their teacher!
You can not only set your kids up for financial success, you can teach them a lot when it comes to money. Teach them how to earn it and how to save for things they want.
Show them the value of earning money on their own and not depending on others for what they want. But most importantly, show them how to use money responsibly.
Keep Reading: How To Raise Money Savvy Kids
8 Things To Do To Solidify Your Child’s Financial Future
Start your kids down the right path when it comes to money and debt with these simple solutions.
1 – Open Bank Accounts For Them
From the minute they are born, you can open bank accounts for your kids. Most banks allow you to open a separate account under your child’s name that is linked to your accounts.
This is a great way to start to save money for them. Money for college or just additional expenses as they get older like camps, sports, etc.
Check with your bank to see what age they need to be to open their own account. Most banks allow kids to have accounts well before they are 18 years old.
The sooner they can open their own bank account and start saving and spending money on their own, the higher chance of financial responsibility they will have when they become adults.
2 – Start a 529 Plan
A 529 plan is a tax-advantaged savings plan designed to encourage saving for future education costs. In short, it’s an easy way to save money for your kid’s college education with a lot of tax savings.
College is super duper expensive. The state I live in (Arizona) will cost my daughter about $100,000 for 4 years of school at an IN STATE university. How insane is that?
I don’t know about you, but I’ll never be able to save up that much money. The best way to help her out with as many of those expenses as I can is with the 529 college savings plan.
The best part of the 529 plan is that if your child decided they don’t want to go to college, it can be transferred to anyone else. You can transfer it to another child. Or even to yourself! I figure, if she doesn’t want to go to college, maybe I’ll take some art of cooking classes.
But if she does want to go to any college, even a community college, the 529 plan is her best bet to avoiding those student loans.
3 – Payoff Your Own Debt
It goes without saying. You can’t save money for someone else if you have no money to save in the first place.
If you want to set your kids up for financial success, you have to learn it for yourself first and foremost. And that means getting your own finances in order.
After all, you can’t expect your kids to grow up and have good money sense if you don’t have it yourself.
So before you do anything, learn how to pay off debt, save some money, and manage your finances.
Kids are like sponges. If they see you spending tons of money, using your credit cards frequently, or talking about how broke you are or how many bills you have to pay… they are going to think that’s normal.
And they will repeat that pattern when they become adults.
4 – Give them an allowance
There are a lot of opinions about whether you should pay your kids for an allowance or not.
But this is exactly why you should.
Giving your kids an allowance has several positive actions.
It allows your kids to earn money. By no means should you give kids an allowance without them having to earn it through chores.
And even though doing chores is an expected part of helping out the family, the benefits of giving your kids an allowance far outweighs their desire to help for nothing.
Let them EARN their allowance. And let them learn how to budget their money by deciding what to spend their money on and what to save for the future.
Keep Reading: Easy Ways To Teach Kids About Budgeting
5 – Teach them about money
The best thing you can do for your kids financially is to actually teach them about money.
When they are very young, you can show them the difference between coins. How some coins are worth more than other coins.
As they get older, talk about how you go to work to earn money. And the money helps pay for the house and car, as well as fun things like ice cream and movies.
By the time they are in middle school, kids should be able to accompany you to the grocery store and learn about price comparisons.
6 – Involve them in financial decisions
By no means should you be involving your kids in your personal finances and details of income or debt.
However, it helps to involve kids in certain financial decisions, so they can learn more about moneymaking decisions.
The next time you plan a vacation, involve your kids in where to go and what to do. Help them decide on a cheaper hotel for a longer stay or an upgraded hotel for a shorter stay.
Take them car shopping. Let them see an expensive car and tell them you can get this car but then you won’t be able to travel or buy new things as much. Or you can buy a more inexpensive vehicle and be able to take more vacations or have extra cash for fun things.
Involving your kids in certain financial decisions can help them understand the value of money. And how to best make these kinds of decisions in their future.
7 – Have a life insurance policy
God forbid something happens to you. With no insurance policy, your child’s financial future can be destroyed.
Check with your current employer to see if they supply your family with life insurance and how much they payout.
If they do provide life insurance, consider getting a policy through an independent broker.
You don’t need to buy a super expensive insurance policy or set your kids up to be millionaires once you go. But assuming they have enough to pay for college or pay their expenses until they are grown will ensure them a bright future, even if you can’t be with them.
8 – Appoint a Guardian For Finances
If something were to happen to you, you most likely have a guardian picked out for your kids. Someone who will love them and raise them as you would have.
But did you know you can choose a person to be their financial guardian?
You have the ability to appoint a person to watch over your child’s finances for them until they turn 18. So if there are any savings accounts for them or a 529 account in their name, a financial guardian will oversee that money and help manage finances for your kids.
How to set your kids up for financial success
Can you imagine a life where you never get into debt, have no student loans, and retire early with no worries?
By teaching your kids financial responsibility and setting them up for financial success from an early age, you can make this possible for them.
With these easy tips, you are well on your way to securing your kid’s financial future.
You might also be interested in:
- How To Easily Pay Off Debt Fast
- Learn to Live Within Your Means Without Being Deprived
- How To Use Credit Cards Responsibly