As parents we want the best for our children, and yet rarely do we tackle the topic of finance with them. But one day they will have to fend for themselves, and understanding finance will give them a huge leg up.
School is tasked with educating children and preparing them for life as an adult. And yet, traditional education usually falls short when it comes to educating children on finance. You need to take their financial education into your own hands.
So what does your child need to know to make it in the “real world?” Freedom Debt Relief created this guide to tell you the topics you’ll need to educate your children on:
Paying For Higher Education
Bringing your child up to speed on how their education will be paid for is very important. Parents who can’t afford to pay for their child’s entire education need to discuss options with their children. Tell your child about opportunities such as scholarships, loans, and part-time jobs.
Freedom Debt Relief sees too many parents who sacrifice their future to pay for their children’s education. College is very expensive, but with careful planning early on, you’ll give yourself the best chance of retiring on time and helping your child get a great education. By bringing your child into the loop you allow enable them to contribute to mitigating the cost of their higher education.
Don’t Keep Up With The Joneses
One of the most commonly traveled routes into financial trouble is trying to keep up with your peer group. Impressionable young adults see what their friends are spending and want to spend the same. Nevermind that your friends may need help from Freedom Debt Relief. Educate your child about living well within their means to build long-term wealth.
Along similar lines, you’ll need to educate your child about lending to friends. Friendships and money don’t mix well. A failed or late repayment causes tension that may end the friendship. Freedom Debt Relief insists that you teach your child to avoid lending money and never let a friend borrow credit or debit cards.
Saving and Investing
Teach your child why it is so important to live below their means. Saving and investing are key to long-term wealth. People who save a large percentage of their income are able to invest that money.
Freedom Debt Relief knows invested money works for you all the time. While you sleep, your money accumulates interest. Over a long time horizon, compound interest could turn relatively small numbers into very big ones. The key is consistent investment over a long period of time. Teach your child that they can build themselves a future where they don’t need to work if they invest wisely.
With more financial technology available through the web, you need to be sure your child can safely navigate online. Teach them the basics of their online checking account including money transfers, ATM withdrawals, and reading bank statements online.
Educate your child on the difference between credit, debit, and prepaid cards. Especially important is teaching your children about paying credit cards on time. This should be included in a larger conversation about credit score. A good credit score means reasonable interest rates on home and auto loans which could save tens of thousands of dollars over the life of a loan.