We all need to manage our money better, but if you have children, you will be keen to safeguard their future by making wise financial decisions. However, there are some common money mistakes made by parents that we think you should be aware of. For a brighter tomorrow for you and your family, you need to avoid these common pitfalls.
Skimping out on life insurance
We don’t want to depress you, but we all die sometime. It’s a harsh truth and one which your children are going to face in the future. Having a family dependant on you, you want to make sure they are well-cared for when you pass. We hope you live to a long age, but having life insurance will protect your family whenever the unthinkable happens.
Not setting up a will
Here we go again with talk of the grim reaper, but you do need to set up a will to ensure your kids have access to your money and assets when you depart this mortal coil. Younger parents may be inclined to put off talking to an estate planning attorney, but we never when our time on earth will be up. Set up a will early, no matter how old you are, as you can still go back and change the will should your circumstances change.
Making bad investments in property
There are loads of ways you can invest your money to build up a sizeable pot for your kids future, and investing in property is something many people do. Not only can you generate income from property, but you will also have accommodation ready for your children to move into when they come of age. Unless you’re a real estate whiz, you should get advice from planning consultants before making the step into the housing market. It’s not as easy as it looks, and you won’t want to leave your kids a potential money pit as your legacy.
Failing to save money
Saving money is something we should all do, as we never know when we might need it. As parents, there is added incentive. You might want to save for your child’s college fund or give your kids a step up on the property ladder. Setting up a separate savings account for your children is a very good idea, especially as it will also gather interest. There are a number of children’s savings account options, so shop around and find the best deal. Your kids won’t be able to dip into it until they are 18, but be sure to opt for an account where you won’t be tempted to dip into it and drain the funds.
Not teaching children the value of money
You should start teaching children the value of money from an early age. This could include giving them pocket money and helping them to save for the things they really want. Many kids grow up thinking their parents are a portable ATM, so you need to learn to say ‘no’ when it comes to handing out your cash. Let them know a little about your financial situation, and show them how you budget. This will add to their education, and turn their notions about money from fantasy into reality.
Your children will need to learn to become financially independent, but you can still take steps to safeguard them for their future. By avoiding the financial mistakes we mentioned, you are giving your children a better tomorrow.
* This is a collaborative post.
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