Parents try to do everything they can to protect their children and prepare them for the future. The hard part is knowing what exactly this means. If you’re thinking about your children’s future, here are a few concrete tips for protecting and preparing your family for whatever may come.
Teach Them That Money Matters
We’d like to think that the school system is teaching our children everything they need to know. However, it doesn’t cover everything. In some areas, the advice they provide is woefully lacking. For example, credit card companies often subsidize the budgeting lessons that schools give to kids. This means you need to teach your kids the importance of saving for emergencies, setting and living by a budget, and investing for the future. Talk about the real value of items, such as the fact that cars go down in value and real estate usually goes up. Discuss the true cost of owning things. For example, a free pet comes with ongoing costs like food, vet bills, and supplies.
You can teach your kids these lessons by letting them earn money with chores and having them buy little items with their own money. When they can associate time worked with cost, they are less likely to beg you to buy things you can’t afford. They’ll understand that money equals work and that you have to work for it. For older children, start a savings account and let them save up for big expenses like trips they want to take or the purchase of their first car. Review bills like their phone bills or grocery bills so that they know where the money goes and how much things cost.
Get Life Insurance
No one wants to die without seeing their children grow up. Unfortunately, this is a possibility. If you die, your family loses a breadwinner, but costs are hardly going to change. This is why families are often thrown into poverty when one parent dies. The solution is to have life insurance that can pay off your family’s debts and provide money to make up for your lost income. Be prepared for your children with a life insurance quote from iSelect. Note that you need life insurance for a stay at home parent, too, since you’ll have to pay someone to take care of the children and the house if that parent dies.
Save for Emergencies
You should always have an emergency fund. At a minimum, you should have enough to cover unexpected emergencies. This could be massive medical bills or car repairs. By having cash saved, you don’t have to go into debt to pay for them. The next step is saving up an even bigger emergency fund. Then you can continue to pay the house payment, the car payment, and other bills if you’ve lost your job. Having a budget that dedicates 10 percent or more of your income to savings ensures that you always save instead of leaving things to chance. A budget will also force you to prioritize spending versus saving, so it’s easier to stop yourself from buying new furniture, signing up for expensive lessons or making another major purchase.