Teaching your child about being in control of their own finances is something you can do from a very young age.
These days, our children are so much more aware of the world around them and can access a frightening amount of information once they learn how to navigate the internet.
As such, instilling in them the ability and knowledge to manage their own finances once they are old enough is a life skill that will always be needed.
Despite being able to start young – teaching them how to be responsible with any pocket money they earn and the benefits of having savings, it is when they reach their teen years that you can really get to grips with their knowledge of money, how much things cost and the importance of living within your means financially.
Be open with your children about debt, your finances and how you manage your budget as an adult.
Showing them how to be responsible when they get their first job or head off to college for the first time and make sure they know how to spend responsibly.
Let them know that even if they struggle with money and managing their own finances, being honest with someone can be much more beneficial than hiding their debt and that they are struggling.
Your credit rating will stay with you for life. Once you open your first one of credit, this stays on file, and all your actions regarding how much money you borrow, owe or even fail to repay will go on your credit record for other lenders to see.
Being irresponsible in your youth can have huge implications should they wish to obtain a mortgage, car finance or even business loans down the line.
If they do get into trouble with credit, there are options such as VA debt management that can help them to regain control and restore their credit rating.
Budgeting is a vital life skill. In an era where the economy is uncertain, and many Americans are being plunged into unemployment or higher levels of debt, knowing how to maximise what you have can be a blessing if they practise good budgeting skills.
- Pay all your bills on time.
- Don’t lend more on credit cards or loans than you can afford to pay back each month.
- Allow for an extra budget for household products and groceries to give yourself a buffer
- Only spend the disposable income you have left once all of your bills, rent/mortgage, etc. have been paid.
- Saving something, even if it is a small amount, is better than nothing, and getting into the habit of putting even a nominal amount into your savings is a good idea.
It is never too early to start planning for your retirement. Even as little as $20 per month every month starting in your 20s can prove to be a worthwhile investment in your future.
Starting as you mean to go on early in life will stand you in good stead for later down the line when you have built up a sizable retirement fund to support yourself in golden years.