The joy and peace that emanates from the parent, when they know their children are financially secure is compelling enough for them to appear fulfilled. Parents are involved in ensuring that their children are financially disciplined and on the path to a stable financial life. However, the loving nature in most parents, makes them constantly share their acquired wealth, intending to help their children attain a certain level of achievement by creating financial platforms they can easily access, even in their parent’s absence.
Parents often like to spoil their children with the good things of life such as clothes, meals, shoes, gadgets, and everything that signifies they are financially stable and can take full responsibility for the children. Hence, they tend to keep helping out even when the children become adults. Taking care of your child at a tender age is paramount as it is your responsibility, but as adults, you should deliberately withdraw from this responsibility. Some parents don’t cut the ‘cord’ and continue to roll out money to their kids when they are in their 20s, 30s, and even later in life.
It is paramount to know the right time to stop helping your children out with money, especially if you’d like a solid retirement. It will be best to take your child off the family payroll sooner than later. Sound harsh? Perhaps in recent times, it seems that way, but remember that years back, once a child turned 18, he was basically on his own. He’d likely marry by his early 20s, have a house, and start his own family. He wouldn’t turn to mom and dad for financial help except he was facing dreadful circumstances.
To avoid a similar financial fate, it’s important to teach children when they are young that they will be expected to stand on their own financially once they reach adulthood.
1. Teach your child financial security
Teaching your child financial security starts from a little discipline, like not reimbursing them when their weekly allowance end of the week. Let them experience what it feels to have little or no money for a while for them to be more mindful of their finances. Instead of running to their aid, at every call or text for funds, sit them down and explain how they can make better spending decisions, how to budget properly, and never run out of funds. These lessons would guide them in attaining financial responsibility. Peradventure they become squanderers, they will remember the essence of financial responsibility, and begin to steadily change their ways.
2. Not all that glitters are gold
In every parent, there is always a burning desire, to give their children the best things in life. Parents sometimes overstretch themselves and go through any and every length to please their children. The inability to meet the needs of the children could be heartbreaking to every parent, and sometimes lead them into making difficult financial decisions.
Parents take loans, juggle between 3 to 4 jobs, cut down on their personal needs, and even sell their properties just to ensure that their children are comfortable. Going through lengths for your children isn’t necessarily wrong. However, as a parent, you shouldn’t give everything to your kids. Some parents can’t bear watching their child cry for something their peers have; so instead of teaching the children why they don’t need it to have it, they go through lengths to provide the item with the impression of “I want to ensure my children are comfortable”. Always help your children to understand the difference between wants and needs.
3. Open a Custodial Account
A custodial account is one of the easiest accounts for a child. It’s a savings account in your child’s name. The account will be accessible to them, with complete control once they become of age, which can either be a good or bad thing depending on their spending habits. The disadvantage is that the funds are taxable from a certain amount.
4. Draft a will
Using Nigeria as a case study, people usually don’t have a written will. Creating a will is vitally important when it comes to protecting your child’s financial future. You will also need to appoint a guardian to take care of your children and name a guardian to manage your property. Drafting a will doesn’t have to be expensive.
5. Invest in the future.
It is important to consider investing in the future of your child. Investment most likely won’t yield immediately depending on the kind of investment and the stipulated time for profit. You should always have an investment plan for your children’s education and life. You can easily invest in Sycamore; an investment process through a peer to peer lending platform which is easy, straightforward, and yields good returns. Simply click the link below, follow the instructions, fund your wallet, and watch your funds earn interest for you while you relax and grow your child’s financial heritage. https://www.sycamore.ng/invest/overview