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Raising financially independent kids

Challenges:  Why is it so hard to raise financially independent kids?

  • Abundance:  We are rich compared to earlier generations.  (My parents grew up in the 1940s.  There just wasn’t money for stuff then.)
  • Consumerism:  There is lots of stuff on offer.  The iPad mini wasn’t around in my day.  There is so much choice today.
  • Peer pressure:  My friends have cool stuff.  Why shouldn’t I?
  • Credit:  I can just put it on a credit card.  
  • Skills:  Parents themselves are often not great at this stuff so find it hard to teach their kids better habits than they themselves have.
What should you focus on to raise financially independent kids?
 
Educate:  Teach age appropriate lessons.
  • Spending: Taking them grocery shopping.  We have $50/We need X & Y.
  • Saving:  Show them how you are saving for retirement or other large goals.
  • Stocks:  This is what the stock market is.
Empower:  Let them start making decisions as early as possible.
  • How are they going to use their allowance?
  • I had a clothing allowance and had to budget for my grade 8 graduation suit.
  • Let them experience the consequences of running out of money and not being able to do/have the things they want.
Exemplify:  Model good habits yourself.
  • Communication:  How do you talk to you spouse about money?  How do financial decisions get made in the family?
  • Credit cards:  What are you habits here?
  • Planning:  Show them a plan that you came up with to achieve a goal.

Tuesday, February 26, 2013

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