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How
to Raise Children to be
Financially Independent
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Examine your own beliefs
and feelings about money. Do you believe that earning an income is a
privilege and challenge; a good thing that can help you achieve your dreams
and goals, or do you see it as a “necessary evil” to getting through life?
If your thoughts tend toward the latter, you’ll have a hard time convincing
your child that building wealth is a good thing. It's difficult to instill
positive financial values that will help your child achieve success if they
come into conflict with your own. Carefully think about your attitudes
toward money and where they came from. No matter how you feel about money,
it's good goal for a parent to assist your child in growing up to be a
financially responsible and secure adult.
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Evaluate and address your
own spending habits. If you spend more than you earn, or if you spend your
money frivolously and neglect to save and invest, don't expect your child to
develop these habits. If you're currently having trouble providing for your
family's basic needs, and money is a constant source of stress in your
household, consider looking carefully at how you are modeling spending
habits and the work ethic. Identify your problem areas, and work to correct
them. Develop a budget and stick to it. Start saving money and invest for
retirement and college funding, even if it is in very small amounts. These
steps will have benefits right now for the entire family and will set a good
example for your child to follow.
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Appraise your general
work ethic. Hard work over time is the only way to financially succeed for
most people. Are you a conscientious worker? Have you tended to change jobs
often, unsatisfied with your career? If so, discuss with your child how you
are determined to alter the choices you've made regarding work. A large part
of thinking positively about making an income is in having a job you enjoy.
If you are not happy in your work, take action and make realistic plans to
get a different job. This is a valuable lesson for your child to experience.
Watching you make these tough changes will have a lasting impression on your
child.
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Think about the values
you want to instill in your child. Most everyone has mixed feelings about
money and about work. Examine how you feel about the ways you make and spend
your income. Talk to your child about your goals and methods - don't send
mixed messages. If you want your child to aspire to build wealth, espouse
the virtues of making plans, persistence in following them, and accepting
roadblocks along the way. Be careful what you say about the wealthy and what
they choose to do with their wealth. It's what you do with yours that
counts. Avoid making comments that suggest having wealth is somehow wrong;
rather, emphasize the good that can be done by earning an income and then
using it to advance your goals, to include helping others. At the same time,
discuss how wealth, in and of itself, doesn't necessarily brings happiness.
Praise the ingenuity and work ethic of financially successful people while
also encouraging your child to be ethical, charitable, and socially
responsible with money. Avoid complaining about your job around your
children. While this is a common feeling for many of us, if this is what a
child observes day in and day out, it may instill in them the feeling that
work is negative and something to be avoided.
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Look carefully at your
work habits. Successful adults are more likely to spring from secure homes,
where parents have enough time to spend with their children, teaching and
modeling important life skills. If you realize that you feel that you have
to work constantly to support your children, reconsider your decisions and
find a way to do with less, showing your child that you value them by
spending time with them rather than making more money to buy more. While
your children may make comments that others have more material items than
you do, you'll be able to point out that, by having less things, you have
more time for each other, which is much more valuable in the long run.
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Invest in your child’s
education early on, making this a high priority as early as possible. A
large percentage of children all over the world don’t get a good education
simply because their parents didn't plan for it (of course, this statement
is a good example of oversimplification, as many people in the world are in
a position where they CAN'T get an education. Nevertheless, an education is
important). Look for the best educational experience for your child, whether
in a public or private school, from the beginning, in kindergarten or
pre-school, one that will challenge your child and prepare him or her for
college or other advanced technical training in the area(s) they are
interested in.
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Encourage your child to
do their best in everything they do, especially in school. Early on,
encourage your child to get good grades, but stress the importance of doing
as well as they can and then being happy and satisfied that they did just
that, no matter the grade. This will develop in them the attitude that
what's important is the energy they put into it, not necessarily someone
else's impression of that effort. For sure, if your child is getting poor
grades, you must be involved and ask why they are not doing better. Be ready
to help them address any problems they may have with learning, and make sure
your home is an environment conducive for studying. Seek advice from
teachers and school counselors. Consider getting a tutor if your child is
still struggling. Instilling a feeling of satisfaction in achieving good
academic performance, you can help your child on the path to self-reliance
and self-esteem.
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Be careful not to
over-emphasize the value of accumulating money to your child, but rather
what can be accomplished with it. Most every parent, at some point, says
that “money doesn’t grow on trees.” It’s important that children understand
that making money requires initiative and hard work. All too often money
only enters the discussion when you’re refusing a child something, and this
can cause your child to see money as a source of stress, rather than as a
means to accomplish their goals.
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Teach your child about budgeting early on, by finding ways for them to
earn and manage money. If you provide your child with an allowance, help
them to develop a budget that includes making short and long-term goals that
include a savings plan, no matter how small. Teach them about investments
and the miracle of compound interest. Be careful not to bail them out if
they spend their money too quickly. Let them experience the consequences of
their actions while they live under your roof. If a child wants something
that they could reasonably save up and buy with their allowance or earnings,
teach them how to set aside a little money each week so that they can
eventually buy the item, and have them keep track of their savings.
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Be very cautious in
insisting that a child must work at a young age. A child's job is to grow
and learn, not earn a living. Do not make your teenager get a job. Resist
this temptation - there's plenty of time to work for a wage after their
education is complete. This is the surest way to cause them to feel that
earning a living is not a positive and rewarding experience. Mowing lawns,
cleaning their rooms or common areas in the house, helping with dishes -
these are all tasks that come with sharing a living a space. Avoid paying
them an allowance for these endeavors. Instead, reward them for assisting
other family members in getting their personal chores done, or for setting
up and running a lemonade stand, or helping a neighbor with a project.
Remember - 'working' is not a responsibility of childhood - ensure they have
time to be kids. Those who do well in life, financially, do so because they
enjoy doing what they are doing. If your teen insists they want to work a
summer job rather than pursuing other learning experiences, because they
have set a goal that requires funds, that's all right, of course, but help
them to develop a good work ethic and appreciate the value of a balanced
life of work and play and relaxation.
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Encourage your teen to
think about the future by sharing your financial plans with them. Discuss
the importance of setting goals early, but also in being flexible as changes
must be made along the way. Building resilience and flexibility are great
life skills to appreciate and learn early on. Encourage your child, even
while in elementary or middle school, to think about what they want to do
“when they grow up.” Emphasize that they may change their minds a few times,
but have them research their choice and write out a plan of how they might
accomplish it. By thinking through a plan with timelines and goals at a
young age, they will develop the ability to list what's required to reach
those goals and how to earn the funds they'll need to fulfill their dreams.
Help them be realistic in setting attainable financial goals, but be careful
not to set unnecessary limits. With hard work and persistence we can all do
amazing things. It's important for our children to understand that building
wealth is a lengthy process for most of us, but that they can have or do
just about anything they want if they’re willing to set goals for themselves
and conscientiously work toward those goals. Patience is a virtue.
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Since starting and
running a business is one way your child can become wealthy, guide them into
starting a very small one, such as raising earthworms or even just selling
candy. Encourage spending a little of it, and investing the
remainder--either by expanding the existing business or starting a new one.
Taken from
WikiHow article originally authored by Rita G. Pickering
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