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Financial Lessons to Teach Your Young Adult Children
Financial Lessons ? Right. Last thing our young adults want is ‘lessons’ from a parent or guardian. We try to give our children everything and teach them all they need to know about life. We want them to be able to survive and thrive on their own as adults. From behaving with manners, to being able to defend and speak up for themselves.
Take Off The Boxing Gloves; Financial Lesson’s Aren’t a Fight
These are lessons that will directly impact your children throughout their lives. Personal finances, however, are usually a sore and difficult subject no matter your age.
Most young adults view money as something they need now so they can have fun. While enjoying your youth is important, there are also crucial lessons to teach your kids about money now. Let’s face it, they have no idea the impact their online shopping addiction can have on their finances. These will stick around as they transition from young adulthood to full on responsible adults. Here’s some financial lessons we can teach our adult children now to set them up for success later life.
Work on a Budget With Them; Financial Lesson #1
Always hearing how important setting up and sticking to a budget is? There’s a reason, It’s essential and extremely helpful. While your kids may roll their eyes at the word, it’s something you should instill in their heads anyway. Teach them a system to keep track of their monthly expenses. Tjos will show them how they can get control over their finances early on.
Time to Get Down n Dirty; Financial Lesson #1a
Having everything in front of them in black and white helps them visualize. Thus helping them realize where they could be doing better with their money. This helps keep them from developing costly habits. There are plenty of different ways you can help them budget accordingly for their monthly spending.
The sooner they realize the ways that developing a budget can help keep them on track. This allows them to take on more adult responsibility and do more of the things they enjoy. This system becomes more effective this way.
Remember When You Were This Age ?
Being against budgeting simply for the sake of being a rebel, sound familiar? This will make it harder for them to adopt it later on. They will also learn best from example.
If you aren’t already, start making a monthly budget of your own. Have your young adult children sit with you while you chart out your expenses. This is so they can realize everything being an actual adult entails. Also, it will allow them to learn the process of budgeting with some hands-on experience.
Negotiating Doesn’t Have to be Hard; Financial Lesson #2
Perhaps one of the hardest things for young adults entering the workforce is knowing their worth. Even for those who have been on the job for a couple of years. When it comes time for a salary review, the prospect of negotiating can seem anxiety inducing. How much they’re worth , ability to defend their skills that can help your young adults stand apart from their peers.
Give a Little, Learn a Lot With Financial Lessons Here
At home with them, don’t laugh off their attempts to barter with you. Telling them that this isn’t ‘Let’s Make a Deal’ and you’re not Monty Hall. Instead, engage them in some negotiation. You don’t have to budge much. For example if they’re trying to get a later curfew you can allow a half hour extension. Having them practice the skill of negotiation is great. It can and will set them up for success when an opportunity is on the line.
If your kids do have an upcoming review or interview? it isn’t a bad idea to do a mock negotiation with them to help prepare. Utilize some generic salary negotiation scripts and mimic the interview setting to make things as realistic as possible. Knowing what to expect and how they can answer some harder questions is helpful. It will help them feel at ease and be better able to stand up for themselves and their worth.
Debt Can Be Managed Staring down the final balance on student loan debt can be extremely overwhelming. Not every young adult will have student loan debt, it’s likely they’ll face debt in some way during their life. These could be possibly medical or credit card debt.
It’s easy for young adults to feel like they’ll never be able to pay it off. They feel like they won’table to enjoy life until they do. Letting them know that it’ll all be OK and that there are options to make the repayment manageable is crucial.
Dust Off The Calculator
Teach them the importance of a low interest rate. That’s something that’s easy to forget about when applying to college or signing up for a credit card. Also, if their debt is due to student loans, encourage them to pay off any interest while still in school. This helps them leave school only owing the principal balance and having to pay less in accumulating interest over time.
Refinancing is a common and helpful way to lower your interest rate and monthly payment. This allow help get you on track to eliminating the debt.
A Look Into the Future
Young adults often don’t to see beyond the enormity of the debt that’s piled up. They think that they won’t be able to enjoy life or make large purchases. However, that couldn’t be further from the truth. Help them understand that this is something that will take time to pay off. There’s hope, with a solid repayment plan and budget in place. Armed with this they’ll be able to get everything they want out of life.
When it’s time for them to get a place of their own, encourage them to keep in their budget. They can easily calculate how much house they can afford while still repaying any debt.
Why Saving Will Help You in the Future; Financial Lessons #3
As previously mentioned, it can be hard for young adults to look into the future. Because of that, they often don’t see a reason to not spend whatever money they have. Still, it is important to help them understand why saving is important, give them tools to help them save and nix any bad spending habits as early on as possible.
Helping young adults understand why they should always save a portion of their money will help them become responsible adults. Having money in the bank will help them be approved for any car, home or other personal loan they should need as they grow up.
To aid them in getting there, suggest some tried and true money saving tips. Even though it might not always seem like it, your input and experience is valuable to them and can help set them up for a prosperous future.
Easy Come, Easy Go
Remember, money is easier to spend than it is to save. That is why your kids might need some extra encouragement to help them kick their bad spending habits to the curb. Sales are hard for many people to avoid, and online shopping has made many shopping addictions worse.
It’s OK to treat yourself every so often, but it shouldn’t be a regular occurrence. Encourage your kids to sit on whatever’s in the shopping cart for a while to avoid any impulse buys. Also help them determine what is a want and what is a need. Just because you have a coupon for candles, doesn’t mean you need another one when you have several that are unused.
Plan Ahead, Plans Aren’t Just for Parties; Financial Lessons #4
No one knows what the future holds, and that’s why it’s important to help your kids be as prepared as possible for any situation. For example, no one saw a global pandemic coming this year, and many were unprepared for the massive job loss that many have experienced.
While everyone faces different circumstances, try to help your kids plan ahead and have a few months’ worth of bill payments in the bank. This gives them some time to figure things out should the unthinkable happen.
The Fountain of Youth Hasn’t Been Invented Yet (but Financial Lessons have!)
Also, there is virtually no young adult who is thinking ahead to retirement, but they should be. There are plenty of benefits to starting early when it comes to saving for retirement. The biggest is that the sooner you start, the more you’ll have saved when you reach the retirement age.
It’s Going To Be O.K., Keep The Path
Waiting just a few years can put you farther behind, which is something that more young adults need to understand. Help them realize that sacrificing one lavish vacation now can be the difference in how they live when they’re older.
As their parent, you have the knowledge and experience to teach them the financial lessons they need to succeed both now and later on in life. Just a little bit of planning, saving and education while they’re a young adult can be the difference maker.
You want nothing more than to see all your kids flourish and have all of their dreams come true. A large part of that is teaching them to be financially responsible now, so they can continue to be in the future.