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How to financially prep your kids

by alex brownbill

My son has just turned 4. My wife and I only have one… so far. But even so, the spectre of education costs that seemed SO far away in the maternity suites 4 years ago is rapidly approaching.

I (like all parents) want only the best for my child. For me, this means the best school I can get him in to. BUT, even if we decided on a public school, the costs for uniforms, devices, excursions and books adds up! Up to $50,000 in some estimates.

And after school, I’d like to help pay for his uni (probably not all of it) and give him a sum of money when he’s 25 to put towards his future (that’s right 25. 18 year olds need a bit more experience before being given any money at all)!

I can’t imagine trying to fund 2 or even 3 kids without a very solid plan backing them up! It would be a thought easy to shy away from.

Another option of course is to give nothing at all. Plenty of adults have done amazing things without a cent of assistance from anyone. But I figure that I have a responsibility to my kids (and myself – they’ll be looking after ME one day) to do the very best I can for them.  If I don’t plan and work and figure out how give them the best of everything, then I’ve failed my responsibility as a parent.

Others have a different opinion, but if you agree with the above (as I hope you do), read on!

The 6 best things you can do :

  1. Don’t reward your child for doing chores. They’re expected and they won’t be rewarded in the future for cleaning their room.
  2. Teach them about money as VALUE. If they can reframe their thinking to understand that financial reward comes from providing value (rather than just doing a job and earning money) they’ll learn a VERY valuable lesson that even most adults have not figured out. If they want to earn extra money, ask them what VALUE they can provide to others. Tell them that the more value they provide to more people, the better they’ll be financially rewarded for it.
  3. Teach them! Teach them the difference between good debt and bad debt. Teach them how to properly allocate their money into different accounts (or piggy banks) as they receive it. Show them the right financial habits as early as you can.
  4. Start working on your own finances. All of the teaching in the world won’t assist your child if you model poor financial habits.
  5. Talk to us about something called an insurance bond. They are the SINGLE best investment you can make. They have huge tax advantages
  6. Start NOW! It’s not too late, but the longer you delay, the more expensive it will get.

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