Setting Kids up for Success
Every parent wants for their kids what we felt we lacked. Future financial success is pretty high on that list for most. Here are 5 important things you can do to help your children succeed financially.
- Lead by example. Demonstrate financial responsibility by living the responsible life. Let them see you paying bills on time. Let them see you working on your budget. Let them help you calculate your savings rate and invest in your retirement. Exposing them to good habits gives them the familiarity to be successful.
- Teach them there are other ways to make money than trading time for money. This is the single most important lesson I wish I would have learned at an earlier age. It is a tragedy to be forced to trade your time and energy for money for the rest of your life. If your children have no savings, no investments, and if their money is not making money for them, then that is where they’re headed.
- Give them the gift of your excellent credit. Add your children as authorized users on your credit cards. This is an easy and FREE way to build their positive credit. Contact your credit card provider to find out the minimum age to be an authorized user on your accounts.
- Open an Indexed Universal Life (IUL) policy and/or Custodial IRA and/or 529 College Savings Plan. While all three of these options are intended to serve different purposes, each can be used for educational expenses. There are overlapping pros and cons for each and deciphering these policies can be a bit challenging. However, do NOT let that deter you from making an educated decision. Consult an experienced financial advisor to help you make the best decisions for your family’s needs.
- Purchase life insurance for yourself. Make sure you have some type of life insurance for yourself in the event of your untimely death or debilitating injury / illness. You do NOT want to put the burden of paying for your funeral expenses on your children.
What tips do you have for setting kids up for success?