Kids don’t come into this world knowing how to save money. You have to teach them that. If you’re not good at it, get good at it. Saving money doesn’t mean you must have a finance degree. It just means you have to have a firm idea of goals and personal values – things you are most passionate about in life.
When you understand your own personal values and goals in life, and you understand why they’re important to you, you can help your kids figure out what their personal values and goals are in life. This, in turn, will help you teach your children about the importance of saving money so that they can achieve their long-range values and lifetime goals.
Consolidating Insurance Policies
Insurance is the foundation of a financial plan. It’s the safety net that protects you from life’s uncertainties. When you have a good insurance plan, you sleep better at night. You’re prepared for pretty much anything life throws at you. Unfortunately, having a good insurance plan isn’t just about saving money on your premiums. Getting the cheapest insurance, and having the bare minimum coverage, isn’t a smart plan. Having adequate coverage that protects you from exposure to catastrophic liability is a smart insurance plan.
Even so, you shouldn’t overpay for insurance – and a good way to avoid doing that is by consolidating coverage. Many insurance companies will discount the total premium if you bind all of your insurance policies with them. It’s not that the cost per $1,000 of coverage magically gets cheaper. It’s that you’re giving the insurer more money to invest. Because of that, the insurer is more financially sound than before and, as a “thank you,” insurers routinely discount premiums. Teach your children about the value of consolidating homeowner’s, automobile
Lead by example. It’s hard to teach your children to be financially responsible when you’re not yourself. Make grocery lists and stick to them. Have a savings account that you regularly contribute to. Show your children how to balance a checkbook and how to save money on groceries using coupons and bulk shopping. Take them with you when you negotiate a price on a new car or make a large purchase. Show them how you research a large purchase online before you go into the store.
Involving your children, and teaching them how you do things, is essential. They must learn from you, and the only way they’re going to learn is if you’re willing to take the time to teach them.
Teach Them About Money
There are so many things to know about money – how it’s made, ways to save and invest, and how to intelligently spend it. Spend some time teaching your children how to use a savings accounts. Give them an allowance that allows them to make choices with their money.
Teach them the time-value of money and the value of savings. For example, you might give them an allowance of $10 per week. Illustrate what happens if they save that money and earn interest on it for a month, two months, or even six months. Then, tell them what they can buy now with that money. Show them the effect of constantly saving money. What happens if they save that $10 every week instead of spending it. At the end of the month, they’ll have $40. What can they buy with $40?
What if they save two month’s worth of allowance? They’ll have $80. That’s almost $100. That’s a lot of money for a child. Over the course of a year, they could save $520. Even if they only saved half of that, that’s still $260 – a large sum of money that can be invested. To motivate your child to save, you’ll need to help them come up with values and goals they want to pursue. Maybe they want to take a trip to Disney World. Maybe they want to go to the movies every week. Maybe they want to buy a purebred puppy. The specific values they pursue aren’t as important as what they mean to your child. Goals and values that are personally meaningful to your kid will ensure that your lessons won’t fall on deaf ears.
Louis Winter is a school teacher. He loves to write about ways that parents can contribute to their child’s education on parenting blogs. To find out more, click www.AutoInsuranceQuotes.com.