For example, only a few of us have received disciplined and balanced money training in adulthood, and basic financial planning or money management is still not taught in schools. If you have children, grandchildren, or other young family members or friends, now is the time to help them develop positive living habits with money.
Start developing good habits when children are young
Ron Dear, The New York Times personal finance columnist, wrote a handy book on how to raise healthy children. But The opposite of being spoiled It is also about helping parents. Some things he recommends:
- Talk to your kids about money. Abacus consultants agree and urge clients to improve their own relationship with money by speaking openly to their children, spouses and friends when money matters arise. Most of us grow up thinking that money is a taboo subject, but once you start communicating openly, uncomfortable tensions dissipate. Children see positive modeling in open communication and can ultimately use it for themselves.
- Don’t vomit. Studies show that excessive consumption affects children’s ability to become high-functioning adults, and that materialism often correlates with depression. Conveying the feeling of “enough” for us and our children creates balance. You can find help on this topic at www.sharesavespend.com,
- Maximum pleasure in what you have. Treat your children and yourself to a week off from a valuable object such as a television or cell phone. You and your children will appreciate them even more when you return.
- Talk about giving. Educate and model generosity for your children by speaking openly about being generous. Giving is positively correlated with happiness, especially with giving away things that are important to us instead of just giving away our “leftovers”.
The allowance of the 21st century
If you have young children, the best way to start teaching money is to give them weekly maternity allowance that corresponds to their age in years. For example, a 10 year old would get $ 10 / week. Then tell your children that they have to split their pocket money into three glasses: one to save, one to give and one to spend. As a parent, you can also offer them interest on their savings. You can start early with a higher interest rate for additional incentives. However, if you don’t want to go bankrupt yourself, make sure to keep the interest you pay at 1% per month.
This system works well in many ways: it encourages saving, provides enough reserve for spontaneous or planned generosity, and tells you how much you can spend walking around a toy store.
A good way to keep track of things is to use iAllowance, This cell phone app automatically pays your weekly pocket money and divides it into the buckets you want by adding it with interest and maintaining an ongoing balance. Your children can also have it on their cell phones and check (but not change) their balance. If a child doesn’t have a wallet, you can buy something for them and instantly pull them out of their digital output container. (The same concept applies to giving).
The teenage years
Abacus consultant, Gabe burner, kindly talks about the creative way he and his wife helped their teenage daughter learn money (while maintaining her parental health):
“At 13, we blamed our daughter for her own clothing and makeup expenses. At first she was skeptical. She feared that “gaining control” would result in fewer dollars. We assured her that we would be fair and that the process would not be a punishment. We just wanted her to take on the process we led for her: make decisions. “You will grow up in five years,” we explained. “We want to give you the opportunity to spend money now because we believe you are ready.”
Our business was when she spent less than we provided, the difference she had to keep. This did not mean that we would not cut future budgets. But here too we have promised that all changes will be accompanied by an open and objective discussion. First of all, we set your allowance monthly. We did our best to make forecasts. We had to make adjustments for items that we weren’t expecting. She needed work clothes for a job as a receptionist on Saturday in a local hair salon. And we decided to leave new ski clothing outside of the process. We learned how we went. We worked together.
After a year of experience dispensing clothing, we increased the clothing surcharge to every three months. We use Square cash Transfer the entire clothing budget for the next season to your Capital One Teen Money checking account, which has its own Visa debit card. She then uses her debit card to do all the shopping. Since the card is connected to Mint.com, it (and we) can see what it is spending.
This summer, she announced that her budget absolutely had to be increased. She didn’t have enough money for “basic things”. We sat down and discussed some of her previous and planned purchases with her. She had put on an expensive swimsuit. And she planned to get two expensive clothes for the upcoming school leavers.
In a mostly rational, mostly calm conversation, we came to the point that she had to make some decisions. If she only wore a dress once, she might want to spend less on money. And if she wanted to spend more, she might have to wear the same dress twice.
Of course, she was disappointed that she didn’t get everything she wanted. But she’ll get what she needs. We shared that mom and dad had gone through the same process. We had been thinking about how much fun it would be to drive to Hawaii over Christmas. But it is the most expensive time of year to travel. And with the summer vacation we had already done, it would go beyond the travel budget. Instead, we decided to go on a trip and visit family in SoCal.
Here is the kicker! She supplemented her weekend salon job with a summer job in a local bookstore. It rolls positively in the dough. If she wants two expensive clothes, she can afford it. And I know that she knows the value of those hard-earned dollars. She recently said to me, “When I see a $ 30 mascara in the store, I think it’s three hours of work!”
Since we know that these desires are unlimited, but these resources are not, we have created a safe space in which our daughter can experience this dynamic. It can make decisions and determine its results itself. If she is an independent adult, she will know how to use her resources wisely. “
Online banking for tweens and teens
As Gabe has mentioned in his story, online banking has never been easier for your children to set up and monitor, and provides a fun and connected way to engage your children.
Step 1: Money (Teen Checking) from Capital One
Set up MONEY is easy and completely online, If you want to set up multiple accounts for Spend / Save / Share buckets, you can easily manage them. Children love it and so do you. Here’s what you need to know:
- It’s free.
- The minimum age is 8 years, but know your child. That is pretty young.
- A link to your existing checking account will be created.
- You can transfer money to your child via the website or your phone.
- You can pay the remuneration with recurring, automatic transfers.
- Your child will receive a Debit MasterCard in your name, what you love.
- You can use a smartphone to deposit checks and check balances.
- There is a network of free ATMs (Costco, CVS, Target and 7-Eleven).
Step 2: square cash or venmo
There will likely be numerous occasions when you and your children will need to exchange money. Someone has no debit card and the other takes lunch and has to pay it back, or your spouse lends makeup money to your daughter and she has to pay it back. something always comes up.
Square cash or Venmo Sending money to one another is as easy as sending a text. It only takes two minutes to download and set up. It is a free app and safe. While this isn’t strictly necessary, you want this process to be as fun and smooth as possible for children. You could even use it with your own friends.
You should consider introducing these apps a little after the online review. It’s a lot to get used to everyone at once. By delaying, you also set the pattern according to which your child expects fun new financial instruments.
Step 3: Mint.com (Personal Finance Online)
This process with your children is not just about creating a sophisticated online cash register. It is about establishing strong financial habits. So connect your accounts with Mint.com,
With Mint, children can see, among other things, how much they spend over time and what they spend it for. You will be amazed when your 14-year-old explains: “I definitely don’t go to the vending machine that often. I think I should pack snacks.” Priceless!
More tips for teenagers
Even if it doesn’t always feel that way, parents keep a huge impact on their teenagers. Give them not only online tech banking, but also short but memorable ideas to develop healthy financial habits:
It may be physically demanding, but it can be emotionally stimulating. Sometimes you have to work poorly, but children ultimately live from responsibility and positive feedback. You will build new relationships and especially love the paycheck.
Save now and frequently
Let your teenagers know if they will save at least 15% (ideally 20%) of their pre-tax income. As of now and for more and more, they are always in solid financial shape. Tell them if they keep only one, it should be.
Investing takes time and patience
Stress for your children when they start investing, they should have a wide view of the markets. Your youth is a cushion for all ups and downs. If they can survive high school, they can survive the stock market.
The returns are amazing
Albert Einstein was asked what was the most powerful force in the universe. He replied: “Compounding!” If your money makes money and that money grows, be careful. Tell your children that they may not be enthusiastic about compounding now, but one day they will be enthusiastic.
Credit and college
One day your child will finally make it to college just to face the complicated nature of the loan. According to the bank rate, only 1/3 of young adults aged 21-29 have a credit card. Sometimes they are blocked by the burden of student debt that they carry with them. Sometimes they are rejected because they have no work experience and have had no meaningful interaction with the financial system.
One thing that parents can do to ensure that their adult children are financially successful is to ensure that they participate in the banking system during their teenage years. It is important that young adults start getting good credit early, even if they are not planning to keep large credit card balances.
Here are three things you can do to help your child find a good loan without contacting you to sign with him:
- Encourage your child to find employment and submit the relevant tax returns responsibly. Banks will seek a source of repayment and certificates will not count.
- Make sure your child has a checking account and knows how to use it. When connected with employees at your local bank or credit union, it is even better.
- If you are concerned that your child will not handle credit responsibly, you should leave a $ 300-400 deposit for a secured card. Secured cards have a low credit limit, which is usually the same as the opening deposit. With a secured card, your child can learn how to use credit without compromising your creditworthiness.
It can be extremely rewarding to teach your child the most important things about money as he grows up. It is never too early to help your children find their way (while quietly minimizing their parents’ own headaches). Reach out Contact an Abacus consultant today for more ideas on how to implement the best strategies.
Note: We are not the author of this content. For the Authentic and complete version,
Check its Original Source