By: Serita Kent
When considering what it takes to build good family relationships, we most often consider the nurturing aspects of the relationship: caring, kindness, love and building character. We also instill values of respect, honesty and loyalty. Often the concept of passing on a financial legacy comes much later in life, if at all. The idea of leaving a financial legacy and building good financial habits is overlooked. By doing this the cycle of financial distress is repeated, and bad financial habits are passed on like a generational curse.
From one generation to the next, parents, especially those of us that were less fortunate, tend to overcompensate with our children by “giving” our children the “things” that we never had. This manner of self-affirmation has in many instances fostered a generation of young adults that go about their daily lives with a severe sense of entitlement and little or no direction when it comes to handling and managing financial matters. By the time we as parents realize what disservice we have done to our children, irresponsible financial habits have formed and we find ourselves working overtime to prepare our children “financially” for the real world. Despite the increased efforts that will be needed to reverse the damage already done, it is never too late to teach our children good financial habits. Below are a few basic financial principles that every adolescent should learn and understand.
Tithing or Charitable Giving
The giving of charity is the manner in which you first learn sharing financially to help those who are less fortunate. Charity can be giving to a local shelter, church, or some other charitable organization that promotes social, spiritual or economical advancement inside or outside of your local community. Tithing is the Biblical principle by which many Christians give a portion of their earnings to the church for maintaining and supporting the church in meeting the charitable needs of the communities in which they serve. The principle of tithing also the Christian way of honoring and giving thanks to God and in returned blessings are released. The principle of giving can be taught at any age. The manner, in which you choose, by tithing or other charitable giving, should be consistent. Both principles of tithing or charitable giving foster a sense of citizenship and responsibility within our communities and throughout the world.
Learning to Save
The notion of generating some type of savings for most children starts almost at birth. Parents are so eager to begin saving for their child’s next endeavor that most children are gifted some type of savings mechanism; savings bond, trust account or even a toy bank before they are able to walk. This notion then becomes a memory around the preteen years and as adults the habit of saving has to be taught all over again. As parents, we are to be consistent in encouraging our children to continue the habit of saving money and watching not only their bank accounts grow, but encouraging them to invest in their futures. Most banks have some type of savings program available for children. Teaching our children to save is also a great way to promote setting financial goals and creating good spending habits.
Setting Financial Goals
Setting financial goals doesn’t always have to be a huge task. Goals can be as simple as meeting a certain savings goal, or earning enough to buy that new video game. Goals may also be attached to an allowance or a personal achievement at home or school. Encouraging our children to set financial goals early teaches them to “make plans” for their money and discourages frivolous spending habits. Setting financial goals enhances the thought process that goes into making good financial decisions.
Using Credit Wisely and Avoiding Bad Debts
The need for our children to understand credit, debt and the impact it will have on their future usually doesn’t occur until after high school graduation. The reality is that most high school graduates still are not prepared to make good decisions about some of the most common financial mistakes for those entering adulthood. Student loans, credit cards, and auto financing are usually the first debt culprits that our children will face. Our teenagers must understand when it is appropriate to use credit, the difference between a good and bad credit profile, and how using credit to obtain goods or services now, will impact them financially in the future.
When leaving a financial legacy we have to ensure that we have equipped our children to carry on that legacy. These few financial principles could be the difference between your children being financially prepared for their futures or having to struggle through learning those same difficult lessons that many of us had to endure along the way. Fostering good financial habits is the first step in ensuring that your family’s financial legacy continues for generations to come.
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