5 tips to help prepare kids for financial success.
Shiny toys, a fun winter vacation and the latest gadgets all make lovely holiday presents for your kids, but you can give them a more lasting gift by helping them prepare for financial success. If you invest in things that keep on giving, you can play a major role in shaping their financial future. Here are some tips:
- Teach money basics early.
You can model financial success by showing them how to have a healthy relationship with money. Educating your mini-me's on money doesn't have to be a time-intensive endeavor, either. Hit “pause" and incorporate bite-sized money lessons during a trip to the supermarket or when they receive a cash gift from a relative.1
- Sign them up for a money application.
A personal finance app geared towards kids can help your members of the “screen generation" wrap their heads around basics such as budgeting, balancing a checking account and tracking their allowance.
- Load their allowance on a prepaid card.
You can link your checking account to a prepaid card to drop your children their allowance or a cash reward for good grades. Not only does this teach your child money management, it helps them understand cash flow.
- Send them to camp.
Sending your children to a camp for coding, STEM (science, technology, engineering and math) or entrepreneurship can bolster their technology, critical thinking and problem-solving skills and potentially boost their earnings potential when they eventually enter the workforce. Employment in computer and IT jobs, for example, is on track to grow 13 percent over the next decade, according to the Bureau of Labor Statistics. 2
- Start a college fund.
It's never too early to kick start a college fund for your kids. A 529 plan is a type of savings vehicle that can be used for higher education expenses such as tuition and books and can receive contributions from relatives and friends. You can also use whole life insurance cash value, which can provide funds for education expenses.3