Raising Your Children to be Financially Independent

In today’s world of credit cards and check loans, the “buy now, pay later” mentality has taken over. People continue to accumulate large amounts of consumer debt to purchase things they want, rather than saving up for them. Consumer interest rates are higher than ever, and paying off the debt becomes an impossible task. Bankruptcy rates are climbing as families struggle to find a way out of their financial nightmares. Where have we gone wrong? I believe it all starts with how we raise our children. Raising your children to be financially independent is not easy. It takes patience and persistence and also requires that you set the example for your children to follow.

However, it is well worth the effort. One of the surest ways to turn our economy around is to teach our children to live within their means, earn interest rather than pay it, and save for the future. The first step in raising your children to be financially independent is to teach them how to work. Children should have responsibilities around the house from a very young age and should be expected to help with cleaning, preparing meals, and yard work. Make it clear to your children that before they can do fun things each day, they must complete their assigned responsibilities. This teaches children a valuable lesson: work takes priority over play. When learned early, this principle will stay with your children into adulthood. Next, children need to have the opportunity to earn, spend, and save money.

Whether you choose to provide a weekly allowance, pay your children for performing their responsibilities, or provide them with opportunities to do extra work for pay, make sure they have regular access to income. Then, teach them to keep track of their money and designate a certain percentage to be saved. You might consider helping them make a special bank out of a small box. Make two compartments–one for savings, and one for spending. Each time they earn money, help them calculate their savings percentage and put that in the “savings” compartment first. Then, they are free to spend the remaining money as they wish. Raising your children to be financially independent requires teaching them to understand that they can’t have everything they want right now.

Don’t give your child everything he asks for. Instead, let him know that he can save up his money to purchase it himself at a later time. Help him do the math. If he earns $5 per week, he can purchase that $20 action figure in just one month. Or, he can spend some of his money and save some and buy it in two months. This teaches two important lessons: 1. If you can’t afford to buy something right now, you need to save your money and purchase it later. 2. Sometimes when you wait to buy something until you have enough money, you find that you really didn’t want it that badly after all. Lastly, raising your children to be financially independent requires setting a good example. You can’t expect your children to develop good financial habits if you don’t practice them yourself.

When you shop, set a specific budget and stick to it. Take your children with you on shopping trips and teach them how to compare prices and find the best bargain. Be open about your family budget and allow them the opportunity to make suggestions and revisions. For example, let them know that if you all stop eating out and going to movies for a few months, you can afford a trip to Disneyland in the future. Children love to be included and will willingly work towards a common goal. If you teach your children to work, provide them with an opportunity to earn, spend, and save money, and set a good example of financial responsibility, your children will learn to be financially independent. This will help them to have successful futures and avoid the financial stress that so many families are experiencing today.


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