The Importance of Teaching Kids to Be Financially Responsible Since Early On – Part 1
One of the most important things that parents can do for their children is to teach them to be financially independent since early in life. Sadly though, a lot of families have learnt this the hard way. In fact, according to a few studies, a lot of people from the last generation have been forced to allow their adult children come back to live at home without them even paying a rent. Even worse, the vast majority of people in the study (more than 90 percent) have also confirmed that they have provided some form of financial support (like a small personal loan for example) to their adult children.
The problem with this of purse, is that these “kids” start to become even more financially dependent on their parents. This comes at a cost naturally, which usually involves parents sacrificing part of their retirement funds for their children when giving them personal loans.
But parents have to understand that a very big part of their parental responsibility is to teach their children financial responsibility that goes far beyond teaching them the basics of economics.
Thankfully for parents, there are many tools to do this, like the website like Mint.com, where kids can learn how to track their spending and such. Other tools like books and online resources also allow kids to manage their budgets quite easily, which is why parents should definitely start making use of them.
Now, after kids have learned a lot about their own budgeting and have started to live on their own, most financial experts suggest that parents should then slowly start to wean their children off their expense accounts. Of course, this all depends on the financial possibilities of parents, who in many cases are already paying for personal loans and other financial obligations they are already committed to.
If, however, parents are able to help their kids with personal loans and such, then experts suggest helping them perhaps even after college. The reason for this is that the moment students graduate from college, the real world sometime shocks them too much, especially financially-wise. For example, they might be faced with expenses they have never faced before, like rent, deposit, student loan and personal loans, insurance, utilities, food, phone bills and more. This tends to be an extremely sensitive period for students to face, especially if they have been used to be completely dependent on mom and dad for their finances.
This makes even more important educating children on the ins and outs of finances and personal loans, which allows parents to ease the way in which their children will face their financial responsibilities in the future.
Besides everything already mentioned, kids who don’t learn early on to be financially responsible have a higher chance of leading a less fulfilling life, since their financial misbehavior with their expenses and personal loan debts will affect not only them, but also their families and loved ones.
That would be it for this entry. Please stay tuned for our next one, where we will be taking a look at even more ways to help parents teach their children how to be more financially responsible and avoid living just on personal loans in the future.