As you continue on your journey to grow your art, brand, business, etc., it is only natural to seek out financial advice. If you’re a parent, aunt, uncle, or grandparent, how do you prep the next generation for a successful future without handing it to them?
Here’s a few sensible ideas for instilling valuable money knowledge to your young ones in an effective and beneficial way:
Help out. Weekly or monthly allowance for help around the house is a perfect way to teach your kids the value of a dollar! How the work load is laid out all depends on your personal parenting style, but show them how pitching in merits an income. You’d be surprised to see how kids will decide to save and spend their money once they’ve earned it themselves.
Make it count. If your child is saving up for a bigger purchase, match their savings. You won’t help until they save, so they’ll learn a lot along the way, and you’ll both feel pretty good. This is also a great opportunity to take them to the bank, and show them how starting a savings account works!
Save now, relax in style later. Roth IRAs are perfect for young money-makers as whatever they invest won’t be taxed until they remove it at 59 ½ or older. Once your teens start working, have them put some of that hard-earned cash into their Roth IRA. Not only is this a smart and amazing way for them to learn about and start an investment, Roth IRAs allow your kids to withdrawal up to $10,000 for a down payment on their first home, tax free!
Be smart about education. We’ve shared a few pointers for saving money on college and working on loan payment plans, but what about planning out a smart money strategy before the first day on campus? While every situation is unique, a great way to save on uncertain students is the 2 year community college plan. Your kids can transfer to a University after finishing up their pre-requisites, which will save you a pretty hefty amount. Public schools closer to home will also do a lot less damage on your wallet than out-of-state or private universities. Similar to a Roth IRA, The 529 college savings plan helps you save on education-related expenses you can withdrawal tax-free with no income restrictions.
Encouraging smart, savvy money habits are beneficial for both you and your young ones. You never know what the future holds, but implementing some of these saving strategies early on can benefit your entire family. As always, feel free to get in touch with Paragon Accountants if you need advice for saving and managing finances for you or your children.