According to a Pew research study, 61% of parents have provided some form of financial support to their adult children. Many parents feel obligated to financially helping their children. And depending on the situation, that is a correct way to think.
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It is not easy to completely stop helping your children financially, especially when situations happen beyond their control. There are some situations when providing financial help is necessary, and other situations when helping is handicapping. You must understand the difference- and most times we do, we just love our children and want to see them succeed.How do you raise a child that does not lean on you financially? How are parents to equip their children with the skills necessary to produce fiscally responsible independent adults?
I have four children. Each one is very different, despite growing-up in the same home. I exposed them to the same training, but each one differs in how they manage their money.
There is no foolproof way to raise financially responsible children, but there are key things that you must do to provide them with a solid foundation. Below are six tips to help you raise a financially responsible child.
- Make them get a job as soon as possible. They do not have to work outside the home, but they must learn the principle of working for things they want. As early as 4 years old, introduce them to the concept of working for pay. It could be as simple as cleaning their room, helping with the trash, or folding towels. Establish a payment system and then be sure to pay them-in cash!
- Teach them how to buy things they want. With the money earned, take them to the store and show them how to make a purchase. Let them experience how to make purchase decisions based on the amount of money they have to spend. When they accompany you to the store, suggest they bring their money just in case they want to make a purchase.
- Teach them how to budget. My children had, Give, Save & Spend jars. They were required to divide their money into those three jars upon receipt, and before spending. Each jar had a required percentage. That practice taught them to live within their means as well as putting others first.
- Involve them in the family budget planning. This may require transparency, but it can prevent requests for activities and items that are not affordable based on the family’s budget. Children should understand how to manage the household finances. You do not have to share every detail, but you can explain and share with them the important expenses and how they affect the household income.
- Enroll them in a money management program. Educators teach the required standards, making them unable to teach financial concepts in depth. Find a program that will provide your child the foundational concepts needed to navigate financially. You can contact The Economic Empowerment Center, Inc., a non-profit organization dedicated to the financial literacy of high school and college students.
- Be an example. If you have financial difficulties, make it a point to get educated. Share this journey with your children, or do it together, making it a family affair. Your children will see that you are not perfect, but are willing to learn how to become a better money manager.
Many parents want their children to be more financially responsible than they were. Remember, children do not do what you say, they do what you do.