Preparing my child for the future
This post is part of Women’s Money Week. For the round up of today’s posts on the topic of future planning and financial planning, visit the website.
As a parent, my future financial planning is two-fold: planning for me and my husband and planning for our daughter. It’s important that we prepare ourselves, financially, for the future so that we can retire comfortably and not be a burden to our daughter and her family. That’s really last on my list of things to do. In order to accomplish that, we have pensions from our employment with our state, we have retirement accounts, and a long term savings account. On top of that, we have a pretty solid plan to own our home (well, our next home. We’re very desperate to move out of our townhouse), remain consumer debt free, and have minimal to no car payments. And, as long as life throws us no major curveballs, we’re on track to maintain our plans.
(I’m pretty sure I just jinxed myself by saying that.)
Then there’s the whole “securing our daughter’s future” aspect. We have had long, intense debates about paying for her college education (my parents paid for my undergraduate degree, he paid for his. We both paid for our grad school degrees with the help of scholarships. We decided to do something in the middle), how to handle the subpar public education system in our state, and how much money to put into extracurricular activities. We’ve also discussed the subjects of allowing her to have an afterschool job, earning an allowance, and who pays for a car when the time comes.
Fortunately, our debates ended in resolution and we’re both on the same page with those aspects of raising our daughter. We also both agree that she does not need to know about the secret savings account we have for her and have been contributing to since she was born and that her 529 plan definitely needs a more regular contribution. Doing all of this will help ensure that she is taken care of through college and she’ll have a little extra to get her started when she graduates. That’s important to us since we struggled through the first few years of our adult lives and we don’t want to her to have to go through that. Paying off the amount of debt we paid off sucked a big one and if we can spare our daughter that aspect of life, we’ll consider that a major parenting victory.
However, we realize that we can’t provide for her forever. There will come a time when the financial assistance ends and we have to hand the reigns over to her. And we figure the best way to prepare her for that is to teach her how to handle money. To do so, we don’t make money a taboo subject in our house. We talk about budgets and savings and sales and using cash. We play games that involve money (Monopoly, PayDay, the Money Savvy Pig game on my iPhone, and her favorite game—grocery store. Also, when she helps me fold laundry, she “scans” the clothes). She has a piggy bank that is really, really full (seriously, the child is a major saver. When she got her first money from the tooth fairy, it went right into her piggy bank). We discussing working and earning a paycheck and the purpose of a bank. We’re trying to provide her with a comprehensive financial education.
It was important to us to pay off our debt before she was old enough to comprehend what was going on because we didn’t want to her to be aware of that stress. I get and appreciate that there are valuable lessons in it but for my husband and I, it’s not something we wanted to put her through. We’re very proud that we succeeded. Because now, on top of modeling good financial behavior, we can also teach her these 10 rules for securing her financial future:
- It’s okay to be unconventional. Right now, the child wants to be a mermaid when she grows up. And a teacher. We tell her there’s no reason she can’t do both. She doesn’t have to be like everyone else in order to earn a living.
- Do what makes you happy. Yes, you might make a nice salary at a job you hate but it compromises the quality of your life. If you can be happy and support yourself doing something that doesn’t pay as much, so what? Go for it.
- Have a good support network. There’s nothing that makes you more successful than having people in your life that believe in you, encourage you, and support all of your endeavors. Having those people makes you believe in yourself and that leads to great things.
- Know how to take care of your money. Earning money is one thing; taking care of it is another. Create a budget, live in your means, invest in your present and your future. By taking care of your money, it will take care of you.
- Get an education. It’s not so much that we care that she goes to college; we just want her to have an education in something that will enable her to have a career. And, on top of that, never stop learning. Because when it all comes down to it, your education is one thing that can never be taken from you.
- Develop a skill to fall back on. Everyone can do something. In tight times, or if you want to branch out on your own, think about your talents and skills and use those for extra income. If you’re not sure what you can do or what you excel at, try some different things. Eventually something will stick.
- Accept responsibility for your actions. It’s okay to mess up. We all do it and it’s expected. But don’t blame anyone else for your mistakes. Own up to what you did to create the situation you’re in. Then reflect on it and work on plan to fix it. And use it as a learning experience.
- Have a work ethic. It’s one thing to have a job; it’s another thing to keep a job. Work hard, be organized, do your best, show up on time, get along with people, meet your deadlines, be a leader when you have to, and ask questions when you’re unsure of what to do. Doing these things will set you up for great success either in traditional employment or entrepreneurship.
- Establish multiple savings accounts. Contribute to them regularly. Those savings accounts will enable you to do so much without having to go into debt. And in my opinion, she needs to have a FU fund. The one that enables her to walk away from any unpleasant situation and land on her feet.
- Enjoy life. Don’t spend too much time stressing about money. So many wonderful parts of life are free. Don’t miss out on those because you’re too busy earning a paycheck or counting pennies. That’s not living.
We know we’re doing the best we can to prepare her for the future. We just hope it’s enough.
Readers, what advice do you have for our daughter to prepare her for a good financial future?