Basics of Family Financial Planning
Financial education is important for every who wants to succeed in life. At schools and universities we receive academic education which usually doesn’t even include the basics of financial planning unless economics is your speciality. That’s why these skills are left for our extra-curricular studies. Financial skills allow you to control your money income and outcome, let you control your expenses and save a part of income every month, set financial goals.
Children need to be taught financial planning from early years. Adults need to shoe how important it is not to spend all money that are presented for a birthday or Christmas. Later on, after importance of money and their value are explained, kids should be given pocket money. Don’t tell them how they need to spend the money, better ask first what would they like to do with them. If you see that the little one made a right decision about a good or service he wants to obtain or even decides to save this money for the future, then you can be in peace. If the answer doesn’t satisfy you, take time to discuss the matter and explain everything that your child doesn’t understand. Just half an hour of talk can change a life for the better!
Play monopoly with grown children. It is easier to involve kids in playing a game than into a serious conversation. They will learn how to deal with money without even realizing it! Besides, when holding shares and receiving dividends (though imaginary), they feel more independent and act like adults. Use percents and punishments if failed to return the loan in a due time.
When two adults decide to create a family they need to be ready for it. Ready in all senses: physical, mental, and financial. Though newly weds may not have sufficient amounts of money in the beginning of their relations, they need to be financially smart not to loose what they have and to become rich people. Having a mutual budget is something new to both since they got used to living on their own that’s why changed can be made step by step. Each couple uses their own way of sharing profits and expenses, but it needs to be decided in the beginning. Also it is important to have everything written down. Create your own family accounting book, it is very handy and you will always be aware of your current financial state. Set goals and connect then with money you need to earn. After achieving one height, set another right away. Thus you will soon reach the place you want to be, your financial comfort zone.
Do not forget to look ahead. Saving money for future children’s college and own future retirement is crucial. If it is hard to do yourself and you are too tempted to spend all the money you receive, create special saving accounts in banks and make an agreement not to touch them until children graduate from school or retirement age comes.
Family financial planning is easy!