Kids grow up with almost no idea about financial health. Schools don’t teach this, so how are your children going to learn if you don’t step up and provide some advice?
Financial health is all about making smart financial decisions to ensure you’re not struggling with debt or other problems. It doesn’t mean you’re wealthy, it just means you’re able to live without worrying too much about your finances.
Keeping that in mind, here are some important financial health topics to teach your kids about:
Saving
The sooner you start telling your kids about saving money, the better. Kids need to learn from a young age the value of putting money away. Get them a piggy bank and set some saving goals. If they reach these goals, they get a little reward. It’s a good way to get them in the habit of not spending any money they receive.
The next time your child asks for something – like a present or a toy – sit them down and tell them about saving. Say that if they save enough money, they’ll get that toy. Pretty quickly, they’ll see the value of holding onto money and what it can do for them.
Saving money for retirement is also a crucial financial goal that provides financial security and peace of mind during your golden years. However, it’s also important to consider that retirement savings can extend beyond your own well-being. As we age, the need for hospice or end-of-life care may arise, and these services can be costly. By diligently saving for retirement, you not only ensure your own financial comfort but also have the means to cover potential hospice expenses in the future, alleviating the financial burden on your loved ones during a challenging time. Planning ahead can help you enjoy your retirement while also providing for your end-of-life care needs.
Investing
This isn’t something your kids will worry about until they’re old enough to have a job. Still, you should teach them about investing. Obviously, you’re not an expert, so you shouldn’t try to tell them how to invest or what to invest in – leave that to a financial advisor when they’re ready.
Instead, explain why investing is good – talk about generating interest and keeping money locked securely away. Explain different investment methods and how they work, bringing in real-world examples to demonstrate the power of good investments. It means that, when the time comes and they earn money, they’ll be more inclined to set some aside for investments.
Borrowing
Lastly, educate your kids on borrowing money. Speak about the dangers of payday loans and other financial products that can put them in debt. Make sure they know that short-term loans should never really be applied for as they can lead to long-term financial problems.
At the same time, talk about positive examples of borrowing money – such as getting a mortgage or using a credit card. Explain how to responsibly borrow money by meeting repayment dates and why this can help them in the future by growing their credit score.
Credit cards are something to really touch upon during this topic as so many young adults don’t know how to use them. Teach your children that credit cards are beneficial, but only when used correctly.
As a father, it’s your job to educate your kids on topics they don’t get taught at school or anywhere else. Financial health is one of these topics, but there are plenty of others you should know about too. Believe me, your kids will thank you for this one day, even if they seem bored and annoyed at the time. It’ll be worth it when they’re not constantly calling you asking for short loans or financial help.
