There is no best approach when it comes to helping your children financially. It all depends on the personality of your kids and your own personal beliefs. We have outlined some suggestions you can follow on how you can support your kids while helping them learn how to spend, save, and invest money.
Saving for their own Education
You should encourage your child to take some of the earnings from their high school job(s) and save them so they can use it towards their education. Even if you can afford to send them to school on your own, having them learn how to budget and save can be a very rewarding life lesson for them. Giving them the opportunity to achieve a real-world goal can help them build positive financial habits that they will use for the rest of their life.
Teaching through Allowance
Paying your children an allowance doesn’t just have to be about providing them spending money. It can be used as a learning opportunity to instill positive financial habits. If you provide them with a decent allowance, you can encourage them to save some of it in their own bank account to watch it grow and gain interest. Allowances should only be paid if the child performs their weekly chores, and extra money can be given out if they go beyond the call of duty. This will give them a sense of earning and hopefully teach them that hard work has its rewards.
As a parent, you want your children to thrive and to have the best life possible. This is why it’s so tempting to make their life easier by providing them with financial support. Giving too much support runs the risk of “affluenza,” which is the loss of initiative and independence caused by receiving too much wealth without any work. This may cause your children to begin feeling entitled, which is causing more harm than good. If your children do need your help, you should only help them with essentials, such as emergency repairs or education. It’s best not to give them large lump-sums of cash as a gift or as their inheritance. Consider giving smaller monetary gifts over time.
No matter which approach you choose when it comes to aiding your children financially, you can count on The Beacon Group of Assante Financial Management, Ltd. to guide you through the process and help you reach you goals.