As a responsible parent, you must inculcate good financial habits in your children. Read on to know what you can do to make your kids financially strong and independent.
Parenting is an art. As a parent, you have to focus not just on their studies and mental growth, but also inculcate good financial habits for their better future. Besides, parents also need to ensure that their children get a prosperous life through the crucial financial decisions they take. A wrong financial step may hurt their future growth. Saving, investing, spending and debt management etc. are some basic financial practices that children can easily learn from their parents.
In this article, we take a look at few important points that you as a parent should remember to make your children financially strong and independent.
Importance Of Being Financially Responsible
Being financially responsible towards your children means taking correct financial decision for the betterment of children’s future. It also means inculcating good financial habits. If children are well exposed to financial discipline, then it will help them deal with financial difficulties with ease and will also help them in creating wealth with the progression of their career. Therefore, it’s your responsibility to acquaint your child with good financial habits and at the same time tell them how to stay away from bad habits.
Financial steps Which Will Help Your Children
Parents must write their will to keep any kind of legal hurdle away from their children. It is also advisable to make changes in the will from time to time in the long term. You as a parent should also insure your lives by buying adequate Insurance cover so that your children don’t face financial hardship in case of parents’ untimely demise.
As children grow, their financial requirement also grows substantially, so parents must start building a corpus. They can start SIP in mutual funds, invest in PPF, bank FD etc. to create goals based corpus so that children do not face a financial crunch. It is also important to involve children in your day to day financial decision making like budgeting and planning. This process will gradually make children financially aware and their decision-making capability would improve.
Financial Steps That You must avoid
For a child, the family is the first school and parents are the first teachers. A child gets basic lessons on life from its family. Therefore, as a parent, it is very important to practice good habits so that the same is assimilated by the child. Let us understand this with the help of an example. Mr. ‘A’ would never repay the outstanding credit cards bill on time. His children noticed this habit and practiced the same without understanding the repercussions when they grew up. They landed up in financial distress and their Credit Score gets spoiled too.
Bad habits like late repayment of EMI, not managing the credit card properly, spending more than earning capacity are some bad habits which every parent should avoid.
Therefore, as a responsible parent, you should give proper financial education to your kids. If your kids are financially weak, then they may lose control of the huge corpus or property you may leave as a legacy for them. If you want to make your children financially strong and independent, then you must become financially responsible towards your children and shape up their future in the right direction.