Financial Independence and Your Children – Part 3

May 18th, 2008 | Stacey | Financial Freedom, Financial Independence

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Attaining financial independence is a skill we often forget to teach our children yet it is a necessary skill for survival. We can never get ahead financially if we continue to limit our potential by handling our resources poorly. Teaching children at a young age how to budget and earn money for financial freedom gives them the skills to succeed in life.

Our series discusses simple ways to teach your children about financial independence so they can someday be financially secure. We’ve talked about giving your child an allowance then having them save and budget for items they want. This gives your child a goal and the feeling of satisfaction they can achieve that goal.

Now that you have your children handling their own allowance and saving for major purchases, it is time to teach them about saving for a rainy day. Open a special children’s savings accounts so there are no fees for having a small balance or making minimal transactions. Have your child save money for their savings account every week and then deposit it once a month. Give your child access to their savings account statement when it comes in so they can track their progress and see how much interest they earn.

If your child wants to take money out of savings, create a chart to show them the progress of their money if they leave it in savings. Discourage taking money out of the savings account, explaining this cash is for their future needs such as college and a car. Encourage your child to save the remainder of their weekly money for the disposable items they want. This will also teach your children discipline with regard to how they spend their money.

Tomorrow we will discuss additional ways to teach your child about financial independence for a freer future.