For the most part, we learn almost everything that will equip us for life in our childhood and teenage years. Whether it’s an analytical skill from math classes, physical prowess from gym classes, or even inter-personal skills from interacting with others, most of these things are learned from a young age.
But there’s one thing that most parents overlook: helping their child manage their finances. As most people grow older, it’s harder for them to stop impulse buying and purchasing their wants over their needs. The majority of households in the United States usually carry an average credit card debt of aroun $8,300.
It’s understood that since we live in a highly-consumerist society which will usually reel us in impulsively buy products that we don’t necessarily need. Still, a level of constraint is necessary when we are responsible for our finances.
As dads, we must teach our children financial responsibility at a young age. ; When your children are older, they’ll be able to manage your income and finances effectively. Teaching your child discipline with their finances can help ensure that.
What Should You Teach Them?
Fortunately, there are different ways of teaching your child about finances. While most of us want to teach our kids how to handle their money directly, there are several ways to introduce them without teaching them now.
Insurance
At some point in our lives, disasters can strike without warning. Your child will need to know that these disasters can often lead to negative impacts on your experiences, whether it’s someone passing away, someone getting into an accident, or storms that will destroy a portion of your home. As such, your child will need to be mentally prepared to set aside a part (when they’re older) of his income when his older for a rainy day.
High winds and intense storms usually batter the majority of the United States’ east coast. That has caused billions worth of damages to cities around the East Coast. For the average individual, hurricanes can cause significant structural damages to your home, which can cost more tens of thousands of dollars. In some cases, storms can also cause substantial injuries among family members. If this is the case, you must invest in hurricane insurance if your family is located at the eastern seaboard.
Let Them Work
The best way to teach finances to your child to let them experience handling their finances firsthand. Of course, your child will need to be within the legal age to work, which is 14 years of age.
Once they can provide a steady income source for themselves, they start being more self-sufficient with how they manage it. While it’s still your job as a parent to bring food to the table, letting them have some degree of financial independence will give them the breathing room to decide what their needs and wants are.
It’s important to note that you should let your son or daughter have some time for themselves. Let them do part-time work first. Once they’ve gained experience in their work, you can let them go full-time if they don’t have anything else. Still, it’s essential to let your child enjoy and have a good time with other people.
Let Them Have Fun
As a dad, you might want to take your child out on a camping trip or let them have fun with their friends. Teaching your child life-work balance can help them manage their finances by appreciating most of what life has to offer.
Saving for College
While it’s true that we want to give our child independence on their finances, it’s also crucial that they start saving up for college. Most colleges (aside from community colleges) will ask for a hefty tuition fee. 70% of college students graduate with a debt when they’re done with college and will take several years to pay off that debt.
Most teenagers will work during summer, and they’ll save up a percentage of that for their college savings. If your child starts working at the age of 14 while saving up in four years, they’ll take on their college tuition fee without too much problem.
There are different ways of teaching your child about finances, but out of all of these teaching methods, the experience will always be the best teacher.
Don’t worry, let your child have fun while they’re still young. You don’t necessarily have to be too pushy with finances. However, it helps to sit them down and have a direct and frank conversation with them about their money. Still, saving up for college should be a priority for teenagers who are about to graduate senior high.