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The Secrets to Raising Financially Independent Kids

Most parents eagerly look forward to the day when they see their kids spread their wings, fly the coop and soar on their own volition to financial independence. Here are 8 secrets for helping to do just that.

Secret #1 Create a Budget

This may be foreign to most kids and even to some parents. It is a basic principle and will help to solve many future money challenges. If kids learn early to create and stick to a budget, many financial pitfalls will be avoided.

Secret #2 The Value of Work

Start with little jobs around the house. Find age appropriate chores for your child. Even toddlers can learn how to work by picking up toys. The sooner children learn how to work, the more responsible they become.

Secret #3 Hourly vs. Salary

As kids get older and start to work outside the home, they need to understand the difference between hourly wages and salary. If your child mows lawns or babysits, they can decide if it’s better to charge by the hour or by the job. Talk this over with them. Create different scenarios and help them to determine the best method of payment.

Secret #4 Set goals

Setting money goals will set your child on a path of financial independence. These goals vary from child to child. It is usually best to have a long-term savings goal such as college or a car. It is also important to have short-term goals to help your child experience accomplishment. Be sure that this goal is attainable. Don’t worry if your child changes his mind – this goal is not set in stone and it’s OK if it changes.

Secret #5 Donate to Charity

Teaching your child to give a portion of her income to those less fortunate will not only teach her to share, but also teach her important lessons on character. Learning to sacrifice is a necessary character trait found in the most successful people.

Read more: Healthy Family Matters

 

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