Parental Tips: How to Prepare for Your Child’s Financial Well-Being

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As parents, it is not only our responsibility to make sure that our children grow into good citizens. It is also our obligation to make sure that they will grow up healthy and financially ready to face the world.

Below are some invaluable tips on how you can help your child prepare for the future.

Educate Your Child

Teaching your kids about money and saving can help prepare them for the future. Financial literacy should start at a young age. According to the National Financial Educators Council, children can already understand the concept of money and its buying power at the age of 7. Children who are taught young about the concept of money are likely to develop excellent financial habits when they grow up. They are also likely to achieve better financial goals when they are aware of the basics of money and saving.

Establish a Trust Fund

Trust funds can help set your child up for future financial success. A trust fund is basically a collection of assets managed by a third party, such as a trust fund lawyer. The assets can range from property, money, stocks, a business, or a combination of all these. The lawyer, who acts as the trustee, will hold onto and manage the fund until it is time to release it to the chosen recipients of the grantor.

Having a trust fund is the best form of transferring assets to your child when you pass away. Unlike a last will and testament, this type of asset transfer allows a probate court to be skipped, ensuring that your child or family is still protected after your death. With a trust fund, no one can easily challenge your decision of transferring your assets to your chosen benefactor.

Save for Your Child’s Future

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Create a savings account for your child and make sure to not touch it unless for an extreme emergency. Saving can help you get your child to college in the future. It is also a good strategy to build your child’s wealth and to secure an excellent financial foundation as he or she grows up. The best time to start saving is when your child is still very young.

Teach your kids the value of saving as well. Saving helps them understand the value of self-reliance at an early age.

Instill in Your Child the Value of Patience

Young children may want to buy anything that catches their fancy. Do not give in to their wishes every time. If you go into stores and they demand to buy a certain toy that has not been on your list of things to buy, refuse them gently. Explain to them that you will only buy the things that are on your list and that you have planned beforehand. Do the same for the things they want to buy online. Explain to them that they may only be able to buy those things if they have saved enough. This way, you will be able to teach your children that not everything may be bought at their whims. It will also teach them to save and work for the things that they want to have.

Convince Your Child to Have an Active Lifestyle

A sedentary lifestyle increases the risk of obesity, cardiovascular diseases, high blood pressure, osteoporosis, anxiety, depression, and many other health conditions. People who have medical conditions tend to spend more on hospitalization and medicines. Their condition may also lead to loss of income on their part. Prevent this from happening to your child. Take extra efforts to make your child love an active lifestyle while they are young. They will take this practice with them when they grow older.

People who are active are likely to achieve their financial goals better as compared to those who have health problems. If you want your child to lead a happy, financially stable life in the future, focus as well on their physical well-being.

Above all, teach your children to live within their means. They should be able to live a better life if they know to spend only on what they can afford. Children who are used to getting what they want even if it is out of the family’s financial capability may fail miserably when they get older.

No matter how much we want to guide our children, we can only do so much for them. We also need to give them the freedom to grow into individuals who can take care of themselves and their financial status independently.

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