Since we have announced that we are expecting our first child, we have been putting a lot of thought into how we can set our child up for success. We’ve discussed private school vs. public school, reading to them, and teaching them various things. But how do you go about setting your child up for financial success?
Why It Is Important
Neither one of our families had great financial success when we were younger. In fact, there were a lot of moments we remember our parents struggling. Because of this, setting our little ones up with what they need to be financially stable is important to us. It should be important to you, too.
When you are able to display good money habits for your kids, it makes it easier for them to be a financially stable individual as an adult. Beyond that, providing a financially sound environment for your children will also help reduce their own anxiety and tensions in the home all around. So, how do you go about setting your child up for financial success?
Setting Your Child Up For Financial Success
At an early age, you begin doing things with your child to help boost their development. For many families, this takes the form of a nighttime reading session, socializing your child with others, and teaching them some level of responsibility. As they grow older, it is important to also teach them some financial lessons.
- Encourage saving. Large purchases in life typically take some kind of planning and usually saving. Try and encourage your child to save up for big items they want or things that are important to them.
- Open a checking account. When your kid reached high school age, it is a good time to open a checking account for them. It will help them learn responsible spending practices. Additionally, when they start working, they will be able to receive a direct deposit.
- Add your child as an authorized user. Once they have gotten used to using a checking account, consider adding them on as an authorized user on your credit card. This can help teach them more responsibility and kickstart their credit score.
- Talk to them about their credit. Many young adults enter their lives without knowing anything about their credit score or how to improve it. Be sure you talk to your child about their credit and educate them on secured credit cards. They can be a great way to help them at the beginning of their financial journey.
Bottomline
There are a lot of things that go hand-in-hand with parenting a child that many people don’t often think about. Educating them about finances starting at a young age with saving and through their teenage years will help set them up for financial success later in life.
Readers, when you had your children how did you teach them about money, saving, and debt?