Will your kids be better or worse off in adulthood? In a perfect world, your children would get a college degree, get good jobs, and live happily ever after. However, many parents are unsure whether their kids will get a happily ever after when it comes to their finances.
In a new study by Haven Life, American parents say they believe their children will struggle financially. They expect their offspring will experience the most difficulty with living costs, student loans, and the fallout from the past economic downturn. However, in light of advances in health care, American parents believe their children will have much better health than them.
“For the baby boomer generation, pocket money from mom and dad was only part of their early childhood. Today’s parents are increasingly prepared to worry about and provide for their children’s financial well-being well far into their adulthoods. With high living costs and loan burdens now a part of normal, everyday life for today’s expectant parents, it’s never too soon to start preparing our children to beat the odds and have the strongest financial footing entering their adult lives. This starts with having open conversations about money,” said Yaron Ben-Zvi, co-founder and CEO, Haven Life.
- Only one in eight adults feel their children will be better off financially.
- Roughly 52% of American adults say they’re children will have less disposable income.
- Approximately 1 in 5 Americans say their children will have a better overall quality of life.
- About 66% of Americans say their children will be as healthy than them are or have even healthier lifestyle habits.
Tips for helping your kids become financially responsible:
1. Start early
Open a bank account for your child and teach him or her the basics of money management. Emphasize the importance of saving and telling the difference between wants and needs. Most banks have special saving programs just for kids. Look for a bank that offers a children’s account with no minimum balance requirement or monthly maintenance fees. This will save you hundreds of dollars in the long run.
2. Encourage financial literacy
Make financial education fun by playing games and taking educational trips. Learning about finances doesn’t have to be boring or complicated. Studies have shown that educational video games can actually improve financial skills. You can also find financial literacy resources online at sites like MyMoney.gov and 360 Degrees of Financial Literacy. The Cheat Sheet also has Savings 101: Your Cheat Sheet to Financial Security.
3. Encourage them to work
When your child is old enough, encourage him or her to take on a summer job or participate in an internship. This will teach your child the value of money. Money that is earned, instead of handed out, will be appreciated more.
4. Teach the importance of giving
While being able to purchase the things we want is great, it’s also important to give back. Teach your children to set aside some money to give back to their community through their time, talents, and money.
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