Are you expecting? When it comes to planning for your first child, many parents have questions about how to be successful. There are all kinds of books out to help. The only thing is every child is different some things may work for some kids, but not all. As a result, many parents find themselves learning how to be a success through trial and error.
I remember when I was pregnant with my daughter Madison. I was so excited to finally have a little person who could look up to me. At my baby shower, I was so overwhelmed by all the love that was shown to her. I remember planning how her room would look, how I would put her in a good school, and how I would make sure she stays healthy. Because of my experience in the financial world, I even started thinking about her financial future.
Many parents don’t think about planning for their children’s financial future until they are almost ready for middle or high school. Why not start before they are born? If you did, you would be able to see a huge difference in not only the amount of money they could have but also in their character.
Unfortunately, the longer you wait to help your child understand the financial world the more difficult it can become. Many children began to develop their perception about money as early as three- years- old.
Although I was fortunate to have some background about the financial world to get my child started on the right track, I understand many parents don’t know how to get started. Here are four tips to help you along your journey.
1. Create a plan for your children. You should determine how much you are willing to save for your children on a monthly basis. You should also decide what type of financial information you want to teach them at every age level. By saving money early, you can lead by example which makes it easier for you to discuss savings with your children when it is time. Having a system to help teach your children financial information at every age level can help things go smoother for you.
2. Open a separate account for your children. When you have another account designated for your child from the beginning, it makes it easier to keep your own finances in perspective. It makes budgeting more realistic because you have a set amount of funding set aside for your child’s needs. It is also a great idea to meet with a financial professional once your child is born to explore all your saving options.
3. Have conversations about money with your children. The earlier you teach your child how to become a “super saver” the more respect they will have for money. A super saver is a person who has a healthy understanding about money and knows how to diversify it. When you talk to your child early, it becomes easier for them to learn how to “pay themselves first”. It also helps prevent them from becoming impulse buyers. Having conversations with your children and allowing them to voice their opinions will help you be more influential.
4. Make learning about money fun. When it comes to younger kids, it is a great idea to use music and videos. Youtube is a great resource. Using flash cards and playing games such as Monopoly are also great financial tools. When it comes to older children, many of them are receptive to games or challenges that will help them earn money. The more hands-on opportunities you give your children the more they will retain what you are trying to teach them. Even if you are not the most creative person, you can still be effective by allowing your children to be involved in the learning process.
While preparing to make our children have the best life possible, it is important to consider their financial future into the planning process. Unlike traditional parenting, financial parenting does not have to be taught by trial and error. Every child will have their own path they want to take in life, but the common denominator for them all will be money. Taking an active interest by pre-planning your child’s financial future can make the difference in whether they are diligent in their finances or live a life owing debt.