If you did not already know, I have a daughter of my own and I know what it’s like to want to ensure that she grows up to be a financially responsible person! So, therefore, I am writing these notes for all parents - older, newer, or soon-to-be. With summer coming up and parents getting to spend more time with their children, it is a suitable time to provide parents with advice on educating their kids about money.
For starters, any chance you get, emphasize the importance of working for your money and try to create an allowance schedule. Not only does this create a sense of appreciation for hard work, but it also rewards them for it. If all goes well, try to create even more opportunities for them to make more money, such as encouraging household chores.
To maximize savings, create a savings account for birthday and gift deposits. Take a fun spin on this tip by offering savings incentives! If they choose to save a % of their allowance once they hit a goal, they get a bonus or get to do something fun.
Teach them about loans as soon as you see fit. If they want to make a “big” purchase, you can provide them with a “loan” which they are responsible to pay back with their allowance.
Additional considerations for parents to ensure a financially safe future for their children include setting up custodial accounts that can be invested in. Ownership can be transferred once the child comes of age (18-25 depending on the registration). Also, open a college savings account as soon as possible. Saving earlier on combats the potential of accumulating debt for your kid. They will thank you for this someday! And finally, put in place a permanent life insurance policy that accumulates cash value. You can never be too safe.
Remember, if you need any help or have any questions, reach out to me here! I’d be more than happy to help.
Registered Representative of, Securities and investment advisory services offered through Hornor, Townsend & Kent, LLC. Registered Investment Adviser. Member FINRA/SIPC. 600 Dresher Road, Horsham PA 19044. 800-873-7637, www.htk.com. HTK is a wholly-owned subsidiary of The Penn Mutual Life Insurance Company. HTK does not offer tax or legal advice. Caserta & de Jongh, LLC is unaffiliated with HTK. For Educational Purposes Only - Not to be relied upon as financial advice. Not all topics discussed may be suitable for all investors.
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