The Building of Wealth
by Richard Lyons
A Financial Journey from Cradle to College
Part I - Saving
As parents, we all want the very best for our child’s future. This includes their health, their education, and of course their financial well being. It will be even more important for them than it was for our generation to be financially disciplined. The following are a few tips on how you can teach your child to become more prepared for their future financial life.
Regardless of your child’s age, the most important thing they can learn from you is how to manage their income in a way that will allow them to save and invest for their future. Whether their income is in the form of an allowance, gifts from grandparents, babysitting income, or even part time income from a job, a portion of all they earn should be saved for their future.
I would recommend that a bare minimum of 10% of all income they earn be set aside for their future investment purposes. This rule should be adhered to for their entire working lives. The younger they can learn this discipline, the more natural it will be once they become adults.
The income set aside for savings will best be done in a credit union or bank savings account. Most financial institutions offer special savings accounts for children that will allow them to watch their savings grow and even earn a bit of income in the form of interest payments. I have seen some credit unions and banks that offer a higher interest rate than normal on child accounts to encourage children to save. Shop around and see what there is in your area.
Saving should start and remain as a fun experience that can be shared between you and your child throughout their development. Watching their savings dollars grow will be a satisfying and rewarding experience for the both of you.
Part II - Investing is featured on our Parents/Investing/Articles page.
About the Author
Richard Lyons is the founder of the blog Wealth Building Tips and Trends and is the author of Five Star Wealth Builder, a comprehensive self help guide for individuals who wish to improve their financial lives.
Richard holds the Chartered Financial Planner designation and has worked in the financial industry for many years helping individuals with their financial needs and concerns.
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