What message does it send to children when they are given control of their parent’s purchasing power?
IPad for seven years olds, cell phones for pre-teens, and even credit cards for minors. It seems that kids today are being escorted into a very adult financial world with open arms.
They are being asked to ‘respect’ expensive and valuable things well before they are able to grasp the concept of how money is made, and what it takes to pay for the things they have.
Many kids today don’t seem to have the same concept of money as that of generations past.
Baby Boomers understand the concept of frugality, having watched their parents scrimp and save and live a very cautious financial life. Generation X lived in a time when technology was still so rudimentary, that access to an “online” purchase was irrelevant.
At the same time, you also have families where children may not have access to their parent’s credit cards, but they witness their parents using credit to keep financially afloat.
Like a sponge, children will absorb what they see, and learn from the actions of those responsible for them. And whether one witnessed a positive relationship with money, or witnessed money as a constant struggle, or continuously stressful topic; that initial view of money can set in motion one’s education on how money works.
If parents first are not handling money responsibly, how can we expect our children to?
Teaching Kids About Credit When Kids Think That Money Must Grow on Trees…
A recent survey provided that over a fifth of children know how to use their parents credit card details to buy things online; as many as 1 in 20 of children ages 5-10 (thismoney.co.uk).
This fosters a very hands-off approach when it comes to the value of money and how to responsibly manage it.
It can be challenging to know where your money is going when you share an account with a significant other; now add your children making purchases on your behalf. Unless you have unlimited wealth, it won’t be long before funds are depleted.
The expectation of the child becomes that they will always be able to buy what they want. When it comes time for them to financially back up their purchases as adults, will they understand the concept of how money works?
Teaching Kids About Credit When Kids See That There Isn’t Enough Money….
Think back to your childhood, did you hear your parents say, “we don’t have the money” or “it’s too expensive?” You may not have had access to your parent’s credit cards, nor did you always get to buy everything you desired.
There are many families in a similar scenario, the conversations on money, vastly different from families where there is enough. And children are still cognizant of their parents spending.
Living paycheck to paycheck or using credit to stay afloat financially can precipitate an equally unhealthy view of money for young children.
Never having enough can certainly teach children to be respectful of how much things cost, yet it can also have an adverse effect if they never witness financial stability.
How Do You Teach Your Kids About Financial Responsibility, When You Weren’t Taught?
Whether you were of the financially privileged, or from a family less fortunate; as you became an adult you had to make your own financial path.
Hopefully you were either raised with or have developed on your own, a fiscally healthy and responsible relationship with money.
For the many who were not raised as such, or have not been able to view and manage money responsibly, you may worry that you are training your children to view money in the same way.
There is hope.
Restoring Your Relationship with Money
Consistently limited and or tight finances puts obvious strain on families and individuals. Often it only takes one unexpected incident to break them financially. Sluggish bank accounts don’t leave room to save or plan for the future either; adding even more tension to one’s financial picture.
When you have enough money to live on, provide for your family, as well as any extra-curricular spending (whether needed or desired); then money management becomes far easier than when there is always lack.
However, there is a way to combat a multitude of issues; your present financial situation, planning for your financial future, all while being a healthy example of fiscal security for your children.
The answer is with Whole Life Insurance. Whole Life insurance is not only succinct in its provision in terms of death benefits, it also provides living benefits.
Living benefits, the cash value of your policy. Cash that is available while you are living. So you don’t have to live pay check to paycheck, or max out credit cards when unexpected life events take place.
With a Whole Life Insurance policy, you are planning for yours and your families future should you pass away, while also ensuring that you have enough financially for your family while you are alive.
A Whole Life Insurance policy will provide you with financial security in the present as well as the future, and can be used as an example of fiscal responsibility for your children.
And securing financial stability not only alleviates the burden and tension of one’s financial life, but also allows one to be a living example to one’s children of how to live a fiscally happy, healthy and successful life.
Read: What is the Child Protection Rider?
Watch: Webinar: Family Banking that Works
Listen: Podcast: Life Insurance as it Pertains to Your Family
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