One of your jobs as a parent is to teach your children healthy habits. This includes eating well and staying active as well as healthy emotional management and, of course, financial responsibility. When kids are young, the latter is often facilitated by a small allowance that introduces them to the basics of managing money. As they grow, their financial needs do, too, and with this, the need for deeper learning around planning for the future.
At the Estate Planning Law Group of Georgia, we’re no more experts in preparing balanced meals or planning physical activity than you, but we do know a thing or two about financial security. As your child becomes a teen, ensuring they develop healthy spending and saving habits depends first on you modeling responsible behavior and then on you providing insight into how to make good decisions. Do this by engaging with the following.
Nurturing Financial Responsibility: Three Key Considerations
1. Make an Example of Yourself
The next time you’re out grocery shopping and you forego the fresh cherries because they’re $4.00 a pound, share the logic behind this decision. Yes, cherries are amazing but remember you have that summer vacation planned and you’d rather use your discretionary spending for ice cream when you’re all out together as a family.
Walking teens through your financial decision-making is a vote of confidence in their ability to partake in adult conversations. Not only that, but it also models mature financial responsibility. What’s more, by making an example of yourself (instead of your teen) you teach needed lessons without directly critiquing their behavior—and if you have teens, you know this is crucial if you want them to actually listen.
2. Let Them Make Mistakes
A mistake isn’t truly a mistake if it doesn’t carry consequences. While it can be hard to let your kids screw up, doing so is the only way for them to gain a true understanding of the importance of money management.
While still under your wing, your teen can make mistakes that hardly cost them anything (even if it doesn’t feel that way to them).
Did they eat out at the mall one too many times this week and now have no allowance left for weekend plans? Tough.
Did they kick a soccer ball through the window? That’ll be $300.
However challenging these conversations may be in the moment, they pale in comparison to the frustration of reckless behavior when you have real adult responsibilities to contend with.
3. Teach Them to Think Ahead
Effective planning for the future implies setting clear goals and going after them. Doing so means building a family budget and establishing an estate plan. As you go about attending to these crucial tasks, involve your teens in the process. Talk to them about balancing money in and money out and about holding separate accounts for separate purposes. Explain the logic that has gone into drafting your Will and why you have medical and financial powers of attorney. Maybe even get them started on doing some of these things, themselves. Have them open checking and savings accounts, help them draft a personal budget, and, as soon as they reach the age of majority, have them get started on their own burgeoning estate plan.
To learn more about fostering financial security from early on or to address any other issue related to estate planning, do not hesitate to schedule a consultation with Jim Miskell at the Estate Planning Law Group of Georgia either by calling 770-822-2723 or using the contact form on our website.
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