With our fast-paced lives and increased spending habits, we tend to lose sight of our children’s future. Here are 4 ways we can financially secure it for years to come.
Considering how fast the world is moving and how quickly we tend to spend the money we have, it’s no wonder that kids these days pick up on this habit of splurging as much as they can rather than saving for a rainy day.
Gone are the days of giving kids just enough pocket money to buy something to eat or maybe watch a movie once in a while. Nowadays, some kids tend to spend a small fortune every week without giving it a second thought while their parents swipe their Credit Cards at the drop of a hat.
You could place the blame at the feet of all kinds of things like social media and peer pressure, but at the end of the day the buck literally stops with you. After all, you’re the main influence on your kids, so how they turn out and how they manage their finances solely rests with you.
Additional Reading: How To Teach Healthy Financial Habits To Your Kids
In any case, it’s a two-way street. The better your financial habits are, the more likely your kids will pick up a thing or two about managing money. However, if you like to live fast and lavishly, then remember that the acorn doesn’t fall too far from the tree.
So, before you head out to paint the town red with your kids in tow, take a minute to rifle through these 4 ways you can secure your children’s financial future.
Live Within Your Means
By living within your means and not splurging every chance you get, you set an example for your kids that will hold them in good stead for the rest of their lives. Just because you have money to blow, doesn’t mean that you have to spend it all.
Spend only on what you really need and use the rest of the money to invest in your children’s future. You could set a certain amount aside every month that could go towards their education, their marriage or even towards encouraging them to pursue interests in art or sports should they be inclined to do so.
But, most importantly, by being frugal with your spending, you keep your own finances healthy while also inculcating a sense of pragmatism in your children. Provided this particular habit rubs off on them, you can be assured that they won’t fall foul of tough times in the future.
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Use Credit Cards Wisely
Credit Cards could be your best friend or your worst enemy, depending on how you use them. There’s a very good chance that your kids will get Credit Cards of their own once they hit a certain age, and the last thing you want is for them to get caught up in a terrible, never-ending cycle of Credit Card debt.
Teach them the importance of using a Credit Card wisely at a young age. Make sure you highlight all the pros and cons of making purchases with a Credit Card, how the billing cycle works, what happens if you delay payments etc.
As the saying goes, knowledge is power. And in this particular case, you would certainly want to equip your kids with all the knowledge and information that they can possibly absorb, especially when it comes to money.
By displaying good Credit Card habits, your children, in the future, could quickly ramp up their Credit Scores, which will leave them sitting pretty when the time comes to apply for a Home Loan or a Car Loan should the need arise.
Additional Reading: Tips To Help You Stay Away From Credit Card Debt
Invest, Invest, Invest
Here’s a sure-fire way of making sure your children are well taken care of as the years go by. By investing at an early stage in their lives, you can watch your money grow in tandem with your children.
Diversify your investments to take full advantage of the benefits that they offer. You could open up Fixed Deposit accounts in your children’s names, which will guarantee them a substantial kitty when they get older.
Similarly, you could also open a PPF account and keep contributing money to it over the years. Since it has a lock-in period of 15 years, you could end up with a substantial amount to take care of any of their educational expenses, especially if they’re looking to travel abroad for further studies.
And, depending on how you’re placed financially, you could even invest in Mutual Funds and SIPs to get better returns in the long run. However, remember that Mutual Funds depend on market conditions, so there’s no guarantee that you’ll make a ton of money quickly. However, if you stick with it, there’s a good chance you’ll make a decent chunk of change over the years.
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The Art of Budgeting
If there’s one thing that will keep your children secure right up to the point where they retire and hang up their boots, and even beyond, it’s budgeting.
Regardless of whether you invest or save your money, teaching them the art of budgeting should be high up on your list of priorities. Not only will it keep them from spending above their means, it will ensure that they always stay within their comfort zone financially.
As they grow older and eventually end up with families of their own, budgeting will become a massive part of their lives. By learning how to budget themselves at an early age, they will more often than not carry on doing so as the years pass by.
This will help them avoid falling short of funds at any given point and will keep them prepared should any financial emergency befall them.
Additional Reading: How Budgeting Can Transform Your Financial Life
These tips aren’t just for your children though. This applies to your entire family. By keeping these pointers in mind, you not only secure your own financial future, but that of your children as well.