Securing Your Child's Financial Future

6 TIPS TO ENSURE YOUR CHILD IS SET UP FOR SUCCESS

I was recently asked the question, "Mike, as someone who has studied and worked in finance his whole career, what advice would you give parents of young children?" Well, it turns out they liked my answer, so I was given the opportunity to share these thoughts for?Kirkwood City Lifestyle Magazine. Here are the six tips I shared.

Which one do you disagree with most?

***The Below was Originally Published in Kirkwood City Lifestyle Magazine ***

Anyone who’s met me has probably heard me talk about financial soundness, long-term investments and planning for the future because of my day job. But these same concepts keep coming to mind when I think about my young son and wanting to provide for him and his future.?It might sound?a little scary, but this is what I’m personally working toward?for my own son’s future.

Let your kids pay for their OWN (higher) education

Becoming financially independent doesn't just magically happen, so kickstart this for him.?Provide your support, but entrust your son?with the responsibility of managing his first major financial obligation on his own.?

[Edit] Author's Note: This is by far the most controversial idea in this article, so let me explain, but before I do, allow me to double down. WE ARE DOING THIS WITH OUR OLDEST SON RIGHT NOW. Allowing your child to take out their own student loans provides them several benefits. For starters, they start accumulating credit at that point. Number two, they learn how to budget, set-up automatic payments, and get some real life bill paying experience when they graduate. It takes the pressure off of YOU by removing the hard deadline of their 18th birthday to be wealthy enough (or severely hamper your own retirement plans) to pay for such a large bill. Even if money is no object for you, don't rob them of the valuable life lessons! If you have the means, you can always swoop in later and pay them off, right? The difference it makes in your adult child will be worth every penny of interest accrued, I am confident of that. I can go on and on about this subject, so feel free to start a conversation!

Equip your kids with an awesome financial life-skills toolbox

Impart your daughter with the knowledge and resources she'll need to take on the world with confidence. Ensure she understands and participates in building her credit, healthy spending habits, savings accounts, etc., NOW.?

Change how you think about higher education

It’s great if your daughter decides to go to college, but it shouldn’t be her only option. She might excel more at a trade/vocational school or decide to get?a two-year associate's degree (options that may still qualify for that 529 plan). Or she might take a different path altogether.

Invest in houses

Consider buying a home with a 15-year mortgage as a rental property by the time your kid is When your son turns 18, you’ll own the home outright and can use sale proceeds to invest in his future or?give it to him as an investment property.

Invest in YOUR household

Our children's future stability and happiness aren’t entirely a result of their finances. Furnish your home with love, support, open communication, healthy habits, and laughter. Prioritize relationships with each member of your household, including yourself.?

Have an exit strategy

We don’t like to talk about it, but everyone is going to die. You may not be able to shield your children from emotional pain, but the best way to protect them financially is to set up your will and trust and have a life insurance policy in place.

What are your thoughts? Are there any tips you'd like to share?