While financial planning is typically stressful, learning how to plan and budget for your family’s financial future does not have to be. One crucial aspect to planning your family’s fiscal future is to include each family member in the planning, no matter how young. Yes, that means including your children.
Financial Planning With Your Children
Including all family members in financial planning helps the younger family members learn about money. According the Office of the Administration for Children and Families Early Childhood Learning and Knowledge Center (ECLKC), teaching your children about money and personal financial situations as early as possible can give them a head start in life by also teaching them about the real world and not just the world they exist in at home.
They also say that teaching your children financial concepts now carries over in other, real life areas, and that having learned those concepts early, they have a better understanding of how to make responsible decisions later on in life.
Some of the concepts children should learn that can help them later in all areas of their lives include:
· Fiscal planning
· Debt planning and management
· Savings and savings management
· Overall fiscal management
ECLKC also states that specifically including your children in the family’s fiscal planning stages helps them to get a feel for what being “responsible” looks and feels like, and allows them to feel included. When your children feel included in the planning, it makes it easier for them to grasp different financial concepts.
Better Decision Making
Teaching your children the basics of different financial concepts is not going to be easy. However, after doing so, your child will be prepared to live in the real world of personal financial management. According to a new report made to Congress, children who learn about money and other responsibilities in early life are less likely to have a criminal life. It also means that if children do wind up making bad decisions, and get themselves arrested, they have what they need to make responsible decisions afterwards.
The following is an example of a real world situation in which learning about money early in life can help a person make responsible decisions, no matter what life throws at him or her.
If your child winds up in jail, for any reason, the court will likely make him or her pay bail. Bail ensures a defendant shows up for court. If a defendant skips court after paying bail, then bail is forfeited, and the defendant goes back to jail until the trial date.
However, courts typically set bail higher than any family can afford, which is why bail bond agencies exist. These agencies help defendants by paying a portion of the bail amount, while the family pays a portion as well, usually 10 percent. The agency paying bail is putting its reputation on the line too, which is why Expert Bail agents usually require a co-signature on the bail agreement, as this helps to ensure the defendant will be responsible and show up for the court hearings.
If you – the responsible party who co-signed the bail bond agreement – have taught your child about money, then he or she is likely to be responsible enough to handle the situation properly and show up for court.
Saving for a Future Family
According to the ECLKC research, children whose parents taught their children about finances before their first job are more likely to open a savings account with their first check instead of wanting to spend the money. They are also more likely to be better prepared for a family.
Learning to be responsible means continuing the learning process, no matter what happens in life.
Continuing with the real world example from above:
After dealing with the criminal charges, the same person will likely not get himself or herself into the same situation again later in life. Instead, he or she is likely to want to settle down, which also requires an immense amount of fiscal responsibility. This example person knows the following:
· He or she should start saving money as early as possible instead of spending it.
· To buy a car, a home, or raise a family, he or she need that savings to grow
Because this person is already saving because of the upbringing he or she has had, this person is more likely to be able by a car, a home, and raise a family, and this person already knows example what to do to achieve these goals. In fact, the same ECLKC research shows that a person who saves early is more likely to have a stable family life than a person who doesn’t save money.
What does this mean?
Well, because this person’s parents taught him or her about money while still a child, this person learned about the responsibility and stability that financial planning and management brings. It also means that including children in stressful financial planning talks is worth the trouble, and can bring more good than harm to the children’s’ futures.
***photo thanks to jwyg & west virginia blue***