These days, parents need help to raise their child that is financially responsible and understand money. When you teach your child to be financially independent, you indirectly yourself turn financially independent. As they grow old and start taking responsibility of their own living expenses, it is important for them to learn financial skills and knowledge so that they do not have to depend on you anymore for financial help.
Your child will eventually start a life of their own and will have a family and thus it is important for them to be financially independent and know their finance better. It is never too late to teach your child some fiscal principles. You can find online sites, apps, and books that can help your child turn into savvy savers and investors.
Tips to Make Your Child Financially Independent:
1. Not to depend on a traditional job
It is important nowadays to find multiple streams of income and even become an entrepreneur. Make them understand that it is not necessary to depend on a traditional job to make their future secure. The ‘one job till retirement’ model does not work anymore. Let your child be an entrepreneur.
2. Tell them, buying a house is not the safest investment
There are many other ways than buying a house that is actually safer to invest your money, for example, index funds, lifecycle funds, savings accounts etc. Learn stock market so that they know the correct path towards investment.
3. Automating the Finance
Automating your money and bills is one of the best ways to up your financial score, curb over-spending and not stressing about bills. Automation means syncing your income into high yield savings account, credit card and your bills monthly. This way you pay first before saving and investing.
4. Perks of having good credits
The pay to have a good credit score is to pay it off fully at the end of the month rather than paying a minimum of it. This shows that you are living above the standard that you should, and this is not the way to live. This way, you can never become financially independent. Teach your child the right way to use a credit card and tell them to pay it off fully at the end of the month. If you use your credit card wisely, it offers great benefits like free flights, insurances, and even fee reductions.
5. Set high yield savings account for them
Online banking does not have any ATM fees and overdraft fees and there are no charges for checking account. Teach them online banking so that they set up a high yield account online as well and watch their money grow.
6. Make them learn how to live within their means
Kids learn from their parents. First, you need to understand this concept of living within your means. They will learn and copy if you do something. You need to do smart buying so that they can learn the same. Have a budget and stay within it, so that your child too can understand the need to have a budget.
7. Make them learn marketable skills
Encourage your child to learn useful skills in this way they can secure their financial future. These days it is more beneficial to learn creative skills such as design, art, computer programing or video production. They can learn such skills online.
8. Encourage the balanced use of social media
Teach your child to curate what they say and how they say to build a personal online brand. Remind them that their online persona can be beneficial to them; they can share their ideas online which can make the world a better place to live.
9. In-still the leadership qualities
Leadership skills are an indicator of success. It includes vision, creativity, responsibility, proactivity, empathy and public speaking skills. Even if your child is introvert, these skills will be very helpful.
10. Let them earn and lose
Talk with your kids about money. Show them how to think logically when it comes to money. Make their wealth and allowance into a game, so that they can learn to invest money carefully.
Child plans protect your child in terms of future financial crises by providing timely financial assistance. Child insurance plans help your child at the stages of education, financial growth, marriage and so on. A child plan ensures your child financial independence. Various insurance plans provide maximum coverage plans at minimum possible costs.
The child gets the benefits once the policy is matured. Insurance providers such as LIC, MAX BUPA, HDFC Child Plans etc. provide different insurance plans to target audience. It is important to compare various insurance plans to know what suits you and makes your child independent.