Financial Independence and Your Children – Part 5
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Our newest series addresses the issue of teaching your children about financial independence. Is it enough to ensure they value their education and get a job? Today, this is not adequate preparation for the future. If you want your children to succeed and have control over their financial situation, you need to teach them about financial independence at an early age.
When we tell our children to work for someone else, we are telling them to put their destiny in another person’s hands. While working for an employer teaches essential skills and gives your children work experience, their ultimate goal should be self-sufficiency. Whether your children establish independent income from investments or their own business, you need to teach them to take control of their own destiny and finances.
We’ve discussed teaching your children how to save and make wise decisions about spending. Another way to empower your children at an early age is to show them how the stock markets work. There are so many ways to teach your children about business markets. Show them the business section of your daily newspaper and explain how stocks rise and fall. Let your children create dummy portfolios at online websites so they can check real-time prices online and see how their imaginary investments would work out. Take the fear out of the stock market so your children feel confident to approach it as adults.
Our next entry will discuss more ways to teach your children about financial independence for a more secure future.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 4
Financial independence seems so difficult to attain when you reach adulthood. One of the reasons may be the philosophies you are taught about money as a child. Often we are encouraged to get a job and be secure but we really don’t know the first thing about attaining financial independence.
Teaching our children about financial independence is one of the greatest gifts we can give them. It’s like the old saying you can give a man bread or teach him how to make it. We want to teach our children how to take care of their money and themselves for greater freedom in their future.
Our series discusses ways to teach your children how to approach finances with confidence and a sense of savvy rather than being submissive and taking second best. Another way to teach your child about the importance of money and how it is spent is to make them part of your major purchasing decisions.
Whether you are shopping for new appliances or a new car, you can discuss the procedures for making major purchases with your children. Let them help you go comparison shopping, do research and look for coupons and discounts. Encourage them to read magazine and online forums to find out the most information. Show your children how you negotiate with salespeople to get a better deal.
When you hold out for the best deal, you’re not only helping yourself but teaching your children. Your kids learn from what they see. After watching you negotiate a good deal, your children will never pay ticket price when they make major purchases. Help your children learn a valuable lesson about financial independence by making them part of a making purchasing decision in your household. Our next entry will discuss even more ways to help your kids learn about financial freedom.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 3
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.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 2
Teaching your children financial independence today will give them the skills they need for success tomorrow. Often we are raised to learn about a variety of other important issues but financial matters are frequently ignored. Our children grow up without fully understanding how to control their personal finances.
Our last entry discussed the importance of giving your children an allowance. It is easy to ask you for money but more difficult to figure out how much of their own money they need to get what they want. The next step to teaching your children financial freedom is to help them create their own budget.
If they have something they want to buy, give them a small notebook to tally their weekly allowance versus the cost of the item they want. When they spend a portion of their allowance on something else, have them enter it in the notebook. Your children will see how spending for a snack will take away from what they are saving for. They will also realize the value of saving when they see their notebook balance start to reach their goal.
This essential lesson will help your children understand how important it is to save for what they need or want. They will also have a feeling of accomplishment when they are finally able to save for what they wanted. A small victory such as this can fuel larger savings victories for your children in the future when they want to save for a car or house.
Tomorrow we will discuss more ways to teach your children valuable lessons about financial independence.
Tags:Financial Freedom Financial IndependenceFinancial Independence and Your Children – Part 1
We all want our children and grandchildren to have financial independence. You don’t want your daughter or son not financially independent and struggling with debt or to survive from paycheck to paycheck. But there is more to financial independence than building your own bank accounts and legacy. You need to make your children and grandchildren independent by teaching them the ways to attain financial freedom.
Our new series offers suggestions for teaching children about financial independence for a more secure, personally fulfilling future. The first way to teach your kids about money is to give them an allowance when they are young. Give them some cash to call their own and let them learn from the experience. While it’s easy to ask mom and dad for money for a toy or whim, it’s more challenging to save for it. Don’t be afraid to let your children develop a personal connection with money to learn from their victories and losses.
As children get older, you can even give them a pre-determined budget for necessary items such as school clothing. By giving your children a realistic idea of what everything costs, from essentials to luxuries, they can be better prepared for the future and how to spend their money wisely.
An allowance is a great way to learn about money. It is better to make mistakes about the wrong color shirt or a toy that doesn’t last than to buy a car or stereo as an adult that isn’t a wise purchase. Your children will learn how to protect their financial independence by getting their own weekly spending money and a bit of freedom.
Tags:Financial Freedom Financial IndependenceAchieving Financial Independence Frees You
Achieving financial independence may seem like a “pie in the sky” goal but what is the alternative? Being enslaved to debt and working for free to pay off your obligations at a much higher rate than they are worth.Every year more than $60 billion in credit card debt is charged off with over $2 trillion in revolving consumer debt being paid off. When you consider the amount of money spent on interest and fees for this debt, it is staggering.
When you are ready to use that credit card, think first. Is the interest charged worth paying it back? Do the fees add up to anything more than unnecessary additional expenses that rob you of extra cash? Do you feel comfortable living beyond your means and using credit to get by? If you answer no to any of these questions, you are already thinking for financial independence. Now you need to take action to free yourself of the debt that drags you down.
Tally your total debts. Figure out your current earnings. If your income is less than your output, it is time to get help from a financial advisor, debt counseling or financial planner who can show you how to make your money work for you. Get a copy of your credit report and figure out how you look on paper. Share all your information with the advisor so you can gain the necessary skills to handle your financial situation and achieve the financial freedom you crave. Every day you remain enslaved to debt, you cannot feel truly free.
Tags:Financial Freedom Financial IndependenceEl Cinco De Mayo and Five Ways To Financial Independence
On el Cinco de Mayo, we are thinking about financial independence and five ways to reach our goals. Though el Cinco de Mayo is about victory in battles that lead to the formal Independence Day in Mexico on September 16, many think of it as a freedom day.
A freedom day involves financial and personal independence, which are closer than you think. Here are five ways to get started:
Know what you owe. Get a handle on your expenses, bills, mortgages, loans, liabilities and everything you owe to everyone so you have a bottom line to work with.
Make a list, check it twice. Find out your assets, make sure you have insurance for them and list them so you know what you would need to replace in an emergency.
Show me the money. Figure out if you have savings anywhere and how much you would be able to put together in cash for a rainy day.
The “b” word we all avoid. Make a budget and stick to it. Include all your expenses including clothing, food and gas as well as savings.
Get passive. For once, getting passive can work for you. Find ways to earn passive income through affiliate marketing, creative endeavors and other business ventures on the side so you can generate extra income.
Financial independence is something we can all celebrate once a plan in put into action.
Tags:Financial Freedom, Financial Independence Passive Income
Is It Ever Possible to Be Financially Free of Parents?
Is it every possible to be financially free of parents? Despite the honest efforts of many people to get debt help and attain financial independence, they still wind up having to ask their parents for help.
This trend is starting to affect people in their 40s and 50s, who are moving back home to live with their aging parents. With rising credit card debts and a slumping economy sweeping the nation, self-sufficient adults are finding themselves without a job and with little or no resources to survive the crisis. As a result, they wind up taking assistance from their elderly parents rather than claiming bankruptcy.
Financial planners are concerned about both ends of this situation. First, the younger generation has to take more aggressive steps to avoid financial peril. Cutting back, saving money along the way and having insurance policies are all ways to avoid financial ruin. Secondly, the older generation is not always equipped to take on the burden of adult children in their 40s and 50s. Often these seniors wind up in financial difficulty themselves when they try to help their family. In fact, Karin Maloney Stifler, a financial planner, states these well-meaning parents, “jeopardize their financial freedom by continuing to subsidize their children.”
Further, a recent AARP survey revealed a quarter of Generation Xers (people between 28 and 39 years old) get financial help from family and friends. The same survey found more than half the people felt they were “financially independent”.
Clearly, the younger generation needs to learn more about the real meaning of financial independence and their parents may need to exercise some tough love to teach them about it so they can finally become financially free of parents.
Tags:Financial Freedom Financial IndependenceFinancial Independence So You’re Not A Servant To Debt
Financial independence cannot be achieved as long as you remain chained to high interest debts. If you remember your history lessons, you will recall studying about indentured servants such as share croppers who worked for free to pay off an obligation. When your hard-earned money is allocated to high interest credit card and loan debts, is there much of a difference?
If you are drowning in credit card debt, you are not alone. There are literally millions of folks in America with a total of over 2 trillion dollars worth of revolving consumer debt. More than 60 billion bucks of credit card debt gets “charged off” as uncollected annually. Debt is like an epidemic sweeping the nation and taking control of more lives everyday. Are you on this distressing bandwagon? If so, it’s take to get off and start reaching toward financial independence.
Look realistically at what you owe and how much you’re spending on interest. Do you feel sick now? If so, it’s time to start making major changes. Stop using your credit cards and start paying them down. Earn extra money by starting your own passive income enterprise so you can pay more toward your outstanding balances. Create a budget and live by it without fail. Review your expenses and trim the fat wherever you can. When more money goes out every month than comes in, it may be time for professional financial advice from an accountant, debt counselor or financial planner.
Financial independence is an attainable goal for everyone, regardless of how much debt you are in. Figure out the damages and work toward eliminating them for a financially free future so you don’t feel like an indentured servant.
Tags:Debt Management Financial IndependenceTeaching Financial Independence To Children
Teaching financial independence to children is a key element to success. Many of us grow up with a myriad of misconceptions about earning money and becoming financially free. Giving children essential skills at an early age will prepare them for a more secure future.
Education – financial independence depends on it. So how do you teach your children about money? Give them an allowance and let them learn firsthand. By kindergarten or first grade, most children are ready to receive weekly allowances. If your little ones get upset, they can get a few shiny pennies until they are old enough to differentiate money and the various amounts. However, don’t hold the older children back for the little ones.
Allowance amount vary based on the financial needs and age of your child. Guidelines include $1 per grade level, starting at first grade. You can also pay an allowance equal to half the child’s age. Pay the money on a regular schedule. Set up expectations for using the cash, such as saving 10 percent and donating 10 percent. You can also have your children put 10 percent in college savings then allow them to spend the rest as they see fit.
An allowance should be separate from chores, which should be performed regardless of pay. Parents can offer inspiration by paying extra for children completing chores outside their regular scope of daily responsibilities. This also teaches your children how to be enterprising and earn extra money when they need it. Avoid lending money ahead to your children – after all, we want to discourage credit. If your child needs to borrow money for an important reason, such as a school trip, make sure the money is promptly repaid on a schedule or withhold a portion of their allowance until the debt is covered.
You can encourage your children to save more by offering to meet their savings, sort of like their own little investment or pension plan.
Finally, if your child spends money on a toy that breaks the first time they use it or wastes their allowance on candy the first day then can’t go out on the weekend, these are learning experiences. Instead of “I told you so” let your child learn from their mistakes to become a wiser consumer.
Teaching financial independence to children starts with a weekly allowance and how its handled.
Tags:Debt Management, Financial Freedom Financial Independence