I salute all of the parents in America. By far, it is the toughest job that we will ever have, filled with moments of both sadness and euphoria, as Billy Joel would put it in his music. It's hard watching our kids make mistakes, but sometimes it is the only way they can learn. However, there are three smart money moves scenarios that I'd like to share with you in order to help you help your children become smarter about their money.
- Zero to 18 years old- INSTITUTE A 50% RULE- Since we continue to move to a cash and gift card society, physical presents are something we don't see as often anymore. The gift card as we know it actually makes you spend more money because it doesn't really feel like cash. That is mentally how younger people get into problems like credit card debt, because you never actually see the money. The 50% rule is simply this; take 50% of whatever cash and/or gift cards your kids get on every birthday and open up a dividend reinvestment plan for them in some type of stock. I've used www.computershare.com for all of my kids and the strategy works just great. By the time they turn 18, they'll have $10,000 or more in an account to give them a head start on their future.
- 18 to 30 years old- INSTILL AN ONLY USED MENTALITY FOR BIG PURCHASES- Unfortunately, social media continues to proliferate that 'everyone has a great life' when it comes to travel, birthday, and goodies. The key is once your kids get into college and then start earning their money, pound home the strategy that recently used is just as good as new for the big purchases. Cars are my number one, but even for items today life golf club sets not everything has to be brand new with a 'brand' name. This philosophy will keep them from getting trapped into lifestyle inflation as they make more money.
- 30 years old- PAY FOR A FINANCIAL ADVISORS- Don't know what to give for a good holiday time gift. How about a year of my services? I say that tongue and cheek, but if your children have come into an inheritance, are part of a trust fund, or are simply making really good money, getting a top notch financial advisor can make all the difference in the world. I've had many smart kids who were poor stewards of their money come to me in order to get on the right track to financial prosperity. When it comes to financial management items, like budgeting or getting educated on topics such as financial products, your children simply may have never had formal training. This type of 'coaching' service can really make a difference.
We want our children to do the best they can in the lives, but we mostly want to see them be happy. Financial mistakes can be one of the paths that lead people to a tremendous amount of unhappiness. Don't let you kids fritter away the money. Old habits die hard, but instituting a few of these smart money moves can help them reach that pot of gold at the end of the rainbow.
Written by: Ted Jenkin
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