As parents, it’s important to make sure you pass on lessons to your children. Unfortunately, too many financial lessons get forgotten along the way. Because of this, young adults go out into the world, ignorant of crucial money lessons. So, what are some things that kids need to know about money?
Effectively Using Credit Cards
Credit cards are not the root of all evil. However, if used wrong, they can hurt your finances and your credit. Young adults need to learn how to use credit cards effectively. This includes not overspending; live within your means. Pay off the balance each month to keep yourself from going into debt. Don’t rely on credit cards to get you through the month.
How to Make and Stick to a Budget
Making a budget is one of the most important things you will learn when trying to understand finances. Creating a budget and sticking to it can help keep a person from going too far into debt. It can also help you save money, stay up-to-date on bills, and understand where your money goes each month.
You Don’t Need to be a Millionaire to Invest
Too many young people are scared to invest. If you ask Ken Fisher, Humboldt Alumni and CEO of Fisher Investments, he will tell you that it is important that young people understand that you can invest with a small amount of money. A few hundred dollars can go a long way for a first investment. Don’t try to wait until you’ve saved up tens of thousands of dollars. The earlier you invest, the more you will have in the long run.
Have an Emergency Fund
Saving money for an emergency is one of the best things you can do for your financial future. Disasters happen, from your car breaking down to medical emergencies, home repair issues, or even layoffs. If you haven’t planned ahead for something of this magnitude, it’s going to crush you financially. Car repairs are costly and home repairs are even more expensive. Have as much as possible in an emergency fund to pay Peter W Smith Construction to fix your home or your local mechanic to fix your vehicle.
Balancing a Checkbook is Still Relevant
Because of online accounts and debit cards, many people today no longer understand how to effectively balance a checkbook. However, this is still a good skill for young adults to learn. Being able to balance a checkbook will help you keep your account straight; things online don’t always show up right, and knowing exactly how your account should look helps you stay out of debt.
Paying Bills is Harder Than it Seems
One thing that many people don’t realize until it’s too late is that it’s easy to forget to pay your bills. When bills don’t get paid, utilities get shut off or possessions get repossessed. Kids should learn how to pay bills before they leave the house. Many parents today are having their children pay the cell phone bill to help them better understand this responsibility.
Ensuring that your child is ready for their financial future is important. Making sure that they have learned these lessons will help them once they have left the home.