As a parent it is normal to want the best for your kids. You work hard and try to give them the finest that life has to offer. When it comes to ensuring the security of their financial future, it is easy for a parent to be left wondering what approach to take. You already contribute to your child’s Roth IRA, building small pockets of wealth for their future when possible. You have even started looking into creating extra passive income with rental properties or flipping distressed properties.
Investing and padding the nest egg for your child’s future is certainly a nice gesture. It is unfortunate that none of these actions will ensure that their financial state will continue to remain solid long after you are gone. On the contrary, doing all this work for your child may have the opposite effect. Children who have everything handed to them in life tend to not understand how to do things for themselves. This is why it is important to educate your kids in the intricacies of how to earn and save money. Such insights will ultimately prepare them with the skills they need, ensuring that they will have a solid financial future.
A Financial Education for Kids
When it comes to educating your kids about money, it is important to get their hands dirty with coins and dollar bills. Handling money is not intended to be a spectator sport. The decisions your children make with money have consequences. For better or for worse, the outcomes that occur from handling money need to be thoroughly explored. If your child does not learn to respect money, by experiencing a few financial losses early in life, then they will likely be reckless with money as an adult. As a parent, it is your job to make sure they learn from their decisions–especially the bad financial decisions. When children learn to respect money, and the value it carries, they will be more careful with money out of habit. It is the habit of building financial success that ensures genuine future financial success.
How Important Is A Parent’s Role in A Child’s Financial Success
John D. Rockefeller is a classic picture of financial success in terms of amassing great wealth. Aside from harboring a spirit of giving, he was also very careful with money. Beyond simply handling money on a regular basis, it was Rockefeller’s habit to account for every penny he received and spent. According to an article in the New York Times, Rockefeller was heavily inspired and pushed by his parents to develop a solid understanding of how to earn and manage his money. The results of the parental guidance Rockefeller received, concerning his early education in financial matters, speak for themselves. In an age of rugged individualism, John Rockefeller became one of the richest men alive. His achievements in the financial arena are a testament to the impact that a parent is capable of bestowing on an eager child.