Born Free Live Free
Impulse buying, momentary gratification, and spending money even when we don't have it have been indoctrinated in our society. It is easy to go get a loan any time and any place. The problem comes when we have to actually pay it back. When you are in debt, you are a slave to your creditor. You cannot live freely and spend money you don't have. If you are one who has become a slave to your finances, particularly to your debt, and you are trying to shake off the shackles, don't you want your children to learn how to live debt free so they never have to go through the financial hell so many people create for themselves? I would hope your answer is yes. So how do you teach your kids to curb their impulses? How do you teach them to save now and anticipate the feeling of buying something they want in cash? How do you teach them to live within their means? Here are some helpful suggestions to get your kids started on the path of financial freedom so they can live debt free from an early age.
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Savings Plans
When your children come to you asking you for something they want do you teach them to do it now and pay later or have someone else pay for it, or do you teach them the sweet anticipation of saving for what you really want? The latter will teach them financial freedom while the former will have them bankrupt before their thirty. If your child comes to you asking you to pay for something they want, like a new toy or to take a trip, help them to secure a debt-free life by sitting down and determining a savings plan. Figure out how much they'll have to earn, how long it will take them to earn it, and if it is really something they are willing to work for. Brainstorm for ideas on how they can make money. Extra jobs around the house, starting their own business, or going out and getting a job if they're old enough can all be great ways for your kids to earn money for what they want. The important part is to create a savings plan so they learn to save for what they want rather than borrowing money or relying on someone else to pay for it.
No Plastic Please
Do not give your child, especially a teen, a credit card or debit card. They will not learn to save if they are able to just zip the card for whatever they want. If you are tempted to give them plastic in case of emergency, instead sit down with your child and teach them about an emergency fund and ask them what they'll do if certain scenarios were to happen (they get in a car wreck, mom and dad are unavailable, etc.). You can help them build an emergency fund and teach them to be prepared for anything if you don't give them plastic to bail them out of a tight spot.
Lessons on Interest
If your child comes to you asking to buy something now, teach them about interest and how some interest works for you and some doesn't. Show your children the difference between how much they'll actually pay if they go into debt for what they want and how much they can earn if they save up for what they want. Lessons on interest can go a long way to securing your child's financial future.
