Teaching children financial independence is not easy in the modern world. Children follow parent’s examples of not waiting to save for items they want and using credit to purchase the latest gadget.
Parents are one of the reasons why children have learnt to become impatient with the things they want. They have lost the art of saving for things and look at ways to borrow money and pay back later even bartering with parents.
Helping children become financially independent
It is important even if you give children pocket-money that you teach them the art of budgeting their money and saving for items, they want. In addition, teaching them the relationship between working and money is a skill that is disappearing, your child needs to associate hard work and earning money as an important life skill.
Teaching your child that you need to pay for your living expenses is vital for when they leave home and go out into the world, if they have the skills and the knowledge to live independently they are less likely to come home because they couldn’t budget their money. Young adults should pay money into the household budget when they start work.
Even when a young adult leaves home, financial support is still not a thing of the past for many of today’s adults. Many of whom, rely on their parents to contribute to their living expenses on a regular basis. This can put an increase pressure on the parents to work longer hours and even retire later because of the financial support they offer their grown up children.
Financial independence is more than ensuring a child earns money, but knows how to spend the money wisely. Teaching children that each week there is a limit to the amount of money you have available is a valuable lesson. Children learn by watching the actions of their parents and if the parents are unable to budget their money accordingly, this pattern can move forward to the next generation of children who miss out being financially independent even after they leave home.
Typical reasons for financial help
Some areas that are typical where parents are helping their children.
- Paying deposits for a home
- Contributing to reducing student debt
- Returning to live with parents
It is important to understand that whilst it is beneficial to help your children if you can, teaching them to become financially independent is even more beneficial in the long-term for your children.
Therefore, whilst they are young it is important to instil a sense of what the value of money means and how they are going to prepare themselves for the world when they have to deal with their own financial situation.
It is not wrong as a parent to want to help their children, but not preparing them for a world where credit is available and not understanding the consequences of their financial choices, in an adult world restricts their potential financial future.
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