Steps to Teaching Your Child Financial Independence

Strong early childhood financial habits
can lead to stronger credit scores and better
control of money in adulthood.

Parents want the best for their kids, they want them to be successful and happy in life and one of the keys to that is instilling in your children the knowledge necessary for financial independence. Lessons in financial independence can start in as young as elementary-aged children, as explained in the recent Equifax finance blog article “Preparing Your Children for Financial Independence.” These lessons help set up the right habits to have a strong credit rating and the ability to purchase Chicago new homes when the time is right!

Set your children on the right financial path with these tips:

1.    Discuss your child’s financial goals and help them come up with a plan for success.  Tell your children what financial independence means. Let them know when you expect them to manage their own finances. Tell them about earning and appreciating money and learning to live within their means. Find out what kind of lifestyle your child plans for, and help set appropriate goals to meet that lifestyle – what level of education will they need to achieve, how will loans and credit factor into that, and how much should they save.

2.    Make use of age-appropriate money management tools to gradually increase your child’s level of responsibility and independence. For elementary aged children, an allowance and chores is a good way to introduce a child to the concept of money management.  Older children can be introduced to the concept of living within their means with a budget to teach them independence and accountability for their own cash flow. Teenagers can work part-time jobs and set up a checking and/or savings account to appreciate the value of money and learn how to manage it.

3.    Be a good role model for fiscal responsibility. Children watch their parents, so your actions regarding earning, saving, and spending money will set the tone for their future success.

To see more lessons in family money, retirement savings, credit scores and more, visit the Equifax Finance Blog.