Secret to Their Success: Giving Your Child a Solid Financial Foundation

posted 4/16/2013 in General

It's never too early to begin teaching your kids good financial habits.

The bags are packed and loaded into the car.  The day you thought would never come is here: you are sending your child off to college.  You have taught them to study hard, how to do laundry and even boil water, but are they truly ready to live on their own?  Do they know how to make and manage a budget?  Do they know how to balance a checking account?  These might seem like pretty easy things to learn, but have you truly given them a solid financial foundation to make it on their own? 

It is never too early to teach your child how to manage money.  It can start as early as you want by having a savings account at your local Lincoln Savings Bank that they make deposits into.  Have your child set goals for themselves on how much they want to save in a certain time, or set a goal to save enough for that one item they want to buy.  As they get older, have them learn to keep track of their account and record when they deposit and make withdrawals.
Around the age of 14 to 16 is a great time for them to possibly get a summer job or part-time job and be able to track their income. They will start driving, needing gas money and possibly a car with insurance. They will want to hang out at the mall, and go out to eat with their friends.  Whether you give them an allowance or they have a job, now is a great opportunity to have them get a checking account.  
This will give them the chance to learn how to record their transactions, reconcile their account to their statement, and the chance to set a budget of what they can spend and what they want to save.   This also gives you as a parent the opportunity to sit down with them and discuss the difference between needs and wants, what expenses they can expect as they prepare for adulthood and how to budget their income to set some savings aside.  Setting up a checking account while they are still at home allows them time to make mistakes while under your watchful eye.
Sending your child off on their own for the first time is a huge step for both of you. You worry if you have taught them well enough to adventure out on their own.  By teaching your child how to save, balance their own account and manage their own income and expenses you can give yourself some piece of mind. 
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