The following is a guest post from Steven Stanich of Financial Planning Tips
I know that many of the great money management skills I have came from my parents, especially when it comes to saving money. And there are definitely certain things I’ve had to learn on my own, and certainly some things I could improve on.
But what if you could teach your kiddos from early on how to be personal financial planning superstars—such that you’d never have to worry about their financial health?
Not that you want to force your children to be any specific occupation, but think of it this way: your children will have more options to choose from by having healthy beliefs and habits about money.
Money is easy to come by
Whether you believe that you need to work hard to make money, or don’t have to work much at all to make money, teaching your children that money is easy to come by will set them up for success.
Beliefs like “money doesn’t grow on trees” are setting your kids up for a bad financial mindset. Money comes and goes and is a tool used to make life easier in today’s world. Some think of it as another form of energy that just changes hands.
Don’t fall into the consumerist mindset
As you well know, every day we are pitched thousands upon thousands of products and services—most of which we don’t need. Television and Internet advertising are also bombarding our children with ads every day, so it is critical to teach them how to think for themselves and not on what the media tells them.
Teach your kids early on to be discerning about what they buy and think twice, even thrice (yes I said it) before buying something. We live in a culture that teaches you to feel good about yourself by buying things instead of already enjoying what you have. This is total hooey. Teach happiness and contentment with whatever you have.
Avoid getting into debt
Ah…credit cards. One of the banes of financial planning. They are not to be used to paying for things when you don’t have the money. They are to be used for building perfect credit scores, earning rewards point and perks and special benefits.
The best way to do this is by having control of your credit card spending yourself and showing them how your balance is zero every month on your statements. Because you pay do it off, don’t you? You don’t want your kids getting so far into debt that they are running around considering some kind of debt consolidation quote to help them out of their financial troubles – yikes!
And speaking of “good debt”, buying a home or investment property is a form of good debt certainly, but what about paying those off as soon as possible too? Far too often people fall into the trap of good debt vs. bad debt. How about no debt at all? Radical? Yes. Possible? Absolutely.
Cash flow is king
Money coming in every month is an important thing and the more the better if possible. If you don’t have cash flow, you don’t have much when it comes to money.
With all the business done on the Internet nowadays, your kids might even be able to start some kind of online business one day as a summer job. Which leads us to the next point…
Entrepreneur vs. Worker mindset
It’s easy to think about having a job and getting a paycheck, working 9 to 5 and doing your time. However, I do not believe this type of thinking will set you on the path to financial independence. I’m not only talking about money here.
There are characteristics that entrepreneurs have that those in the worker mindset don’t—namely passion, independent thinking, taking responsibility and leadership.
Even if your hold down a job, thinking of yourself as a “business of one” is pretty much status quo today, because certainly companies and the government won’t take care of you when it comes to retirement.
Money is not the end all be all
Yes money makes life easier but only if you realize that it is a means to a better life. Also teaching the idea of being happy with what you have is certainly important and that money is an assistant to having more freedom.
But as they say, if you aren’t using the money and money is using you then you’ve lost sight of how to manage money in a healthy way. Certainly you don’t want your kids to be unhappy and rich. Teach them to be happy and rich and things most likely will be much easier for them.