financial Sep 21, 2022
It's no secret that many adults lack basic financial literacy. In fact, a study by Financial Finesse found that 57% of Americans don't have $500 saved for an emergency. Given these statistics, it's not surprising that teaching children about money is becoming increasingly important. After all, financial literacy is a critical life skill that can help set them up for success as adults.
Here are 10 reasons why children should be taught financial literacy, along with some tips on how to help them start:
- It will teach them the basics of budgeting and saving.
One of the most important aspects of financial literacy is learning how to budget and save effectively. Teaching your children about budgeting early on will help them develop good habits that will last a lifetime. You can help them get started by setting up a savings account in their name and encouraging them to make regular deposits. You might even match their deposits dollar-for-dollar to give them a little extra motivation.
- It will help them understand the value of money.
Many children don't really grasp the concept of money until they start earning their own income. As a result, they often spend without thinking about the consequences. By teaching your children about money early on, you can help them understand its value and instill in them the importance of being thoughtful about their spending choices.
- It will teach them about responsible credit use.
Credit cards can be incredibly helpful when used responsibly. However, if misused, they can quickly lead to debt problems. That's why it's important for your children to understand how credit cards work and what using one responsibly entails. You can help by getting them a credit card with a low limit and demonstrating how to use it wisely yourself.
- It will help them set financial goals.
One of the best ways to ensure that your children are successful financially as adults is to teach them how to set financial goals at an early age. This will not only help them develop good planning skills but also give them something tangible to work towards throughout their lives. You can assist by helping them brainstorm goals and figure out practical ways to achieve them.
- It will teach them about investing.
Investing is another critical component of financial literacy that oftentimes gets overlooked. Learning how to invest properly can make an enormous difference in terms of wealth accumulation over time. You can introduce your children to investing by opening a brokerage account in their name and making small investments on their behalf periodically.
- It will teach them about retirement planning.
Most people don't start thinking about retirement until they're well into adulthood—and by then, it's often too late to make significant headway on saving for retirement costs like housing, healthcare, and travel expenses. That's why it's important to start teaching your children about retirement planning as early as possible so they understand the importance of saving for the future. You can open up a Roth IRA account in their name and explain how it works—and grows—over time.
7 It will teach them about philanthropy.
Giving back is an important part of being financially literate. Not only does philanthropy make the world a better place, but it can also have tax benefits —win-win! You can encourage your children to give back by helping them select a charity or causes they care about and donating on their behalf. You might even pledge to match their donations dollar-for-dollar up to a certain amount each year.
8 It will provide peace of mind for you as a parent.
No one wants their child to struggle financially as an adult, but the unfortunate reality is that many people do just that . By teaching your children about money now, you can provide yourself with peace of mind knowing that they'll have the skills they need to thrive financially as adults . And isn't that what every parent wants for their child?
9 It will foster independence in your children.
As your children become more financially literate, they'll also become more independent —both financially and otherwise. They'll feel empowered knowing that they have the skills and knowledge necessary to make sound financial decisions throughout their lives. And who knows? They might even become fiscally responsible enough one day to bail YOU out when YOU need it! (Hopefully not anytime soon, though!)
- It teaches essential life skills.
At its core, financial literacy is really just another life skill —one that happens to be incredibly useful
A great way to start your child saving is with a whole life policy
You may be wondering if it's really necessary to get life insurance for your child. After all, they're probably not going to need it for many years, if ever. However, there are some very good reasons to consider purchasing a whole life policy for your child as soon as they are born. Here are just a few of the advantages of whole life insurance for children.
Whole life insurance policies offer many benefits that other types of policies do not. For example, with a whole life policy, the death benefit is paid out regardless of when the policyholder dies. This means that if your child were to pass away unexpectedly, you would still receive the death benefit to help cover funeral expenses and other final expenses.
Another advantage of a whole life policy is that it builds cash value over time. This cash value can be used for things like college tuition or a down payment on a house. If your child never needs to use the policy, they can simply keep it until it matures and then cash it in for the full value of the death benefit.
Lastly, whole life insurance provides peace of mind. No one likes to think about their child passing away, but it's important to be prepared for anything. If something did happen to your child, whole life insurance would give you one less thing to worry about during an already difficult time.
Conclusion:
We do want our children to be financial literate because it will be one of the most important skills ever learned. My parents bought a whole life policy for me when I was a baby. I cashed it in when my first child was born so that we had the money to fix up a baby’s room and to buy all the things you need to have when a baby is born. No one wants to think about their child passing away, but unfortunately, it is something that happens every day. Whole life insurance is an important part of any family's financial planning, so don't wait any longer to get coverage for your child. I hope this article gave you some food for thought because this will help your child be a better person.
Until next time
Take care of you
Claude Timothy
