Is Your Child Financially Prepared?


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Is Your Child Financially Prepared? :

Aug 24, 2007

In the world we live, no one grows up to become financially knowledgeable without guidance along the way. The number of young adults struggling to make ends meet bears witness to the fact that many people reach maturity without an ability to look after themselves.

Unfortunately, there is nothing that most young people encounter in life that prepares them to survive financially in this world. Whatever Americans know about handling their dollars did not come from school. This is understandable, of course, if only because the typical classroom teacher is equally mystified by the world of money. Nor is there any information to be gleaned from the media and its supporting advertising. Those formative years, in which the average child spends 28 hours per week in front of a television screen, does little more than inculcate a taste for Pop-Tarts, Cocoa Puffs, hip hop music, designer jeans and the emulation of celebrities.

I’m convinced that financial counseling must come from the parent. If you’re not indoctrinating your offspring into sound habits of thrift and discernment, there is a likelihood they will blunder through life with no sense of monetary values. That’s a recipe for personal disaster. I’d like to offer the following suggestions on how to instill a sense of fiscal responsibility in your children.1. First and foremost, start early. There is no more accurate truth than the ancient adage: As the twig is bent, so grows the tree. As soon as your progeny develop an awareness of what is going on around them, they’re entitled to instruction and guidance on the realities of the financial world. Admittedly, the approach to your 4-year-old will be far different than to your teen-ager. Nonetheless, if properly presented, both will acquire skills that will accompany them over a lifetime.

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2. Mean what you say. Whether or not you believe it, your children really pay attention to what you say and do. As the first authority that normally appears, a parent becomes a model on which the child fixates. It’s important to realize, however, that your counsel must be consistent for the lessons to be learned. If messages are contradictory, they will be received as mixed signals. If, for example, parents proclaim the importance of living within their financial means while simultaneously indebting themselves through purchases they cannot afford, it will not go undetected by the children nor induce them to pursue habits of thrift. The only way that sound financial values can be transmitted from one generation to the next is by a systematic and continuous program that reinforces these values. Only through precept and example will sound habits be ingrained.

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