Your children will thank you for these smart money tips


This article from Chuck Jaffe, senior columnist for MarketWatch, offers some great financial advice for college students as they build the foundations of their adult lives. And even if you’re already an adult who’s way past the point of building that foundation, there’s solid financial advice here we can all learn from.

Our job as parents is to inspire our children to take ownership of their finances, rather than simply to educate them. The more we get children excited about the potential and importance of their finances, the more they will take charge responsibly. Here are some financial realities that graduates will face in life.

Having savings govern your spending habits turns out better than if spending determines how much you save.

One area where our kids do not have it easier than we did concerns controlling spending, and the ability to develop good habits easily.

Children – as much or more than all consumers – are assaulted around the clock by a huge effort to get them to spend money. Our forebears had to go to a store, and only had to protect their dollars from frivolous spending during business hours; today it’s possible to blow the paycheck within minutes of coming home with it.

There’s nothing wrong with spending money, but it shouldn’t drive all other decisions.

Too many people save only whatever they have left when they’re done spending each month, leaving little or nothing left to pay for their future. If they instead spent money only in line with what they already have saved, they’ll forever be inside of their budget.

Age is an opportunity.

Youth gives new college grads a chance to get ahead, rather than be forced into a lifetime of playing catch-up.

Gene Natali, co-author of “The Missing Semester,” said kids should be encouraged “to save their first $1,000 as fast as they can, and then to put that money away, because it will give them a margin of error to work with for the rest of their lives.”

Believe that you can make it financially, and then work to make it a reality.

Too many people think they will never pay off the debt or escape from their financial misdeeds, so they keep pushing these obligations down the road, trying to ignore the mounting evidence that they’ve impaired themselves and their family for life.

There’s no reason to let a tough financial situation reach rock-bottom until you have some epiphany on how to progress. Instead, start from a position where you believe those financial dreams are possible, work to achieve them and then protect them from anything that could crush them.

[Read the full article]

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