What Your Kids Teach You about Finance
From the moment they're born, your kids learn from you. But knowledge can be a two-way street, and as perceptive parents discover, we can learn from them, too! Put yourself in their light-up sneakers, and you just might find yourself on a path to financial success. Here are eight tips your kids can teach you about finance:
- Think before you buy. You spent a fortune getting the new must-have toy for your son, and he has more fun playing with the wrapping paper and box it came in. Sound familiar? Well, it applies to adults, too. Before you make a new, flashy purchase think first, do I need this item? If your kids can have hours of enjoyment turning a box into a rocket ship—can't you use your imagination and repurpose something you already have?
- Do your homework. Practice makes perfect, and your kids have to buckle down and get their work done. The same goes for you when it comes to financial planning. Using online financial calculators, researching a major purchase and making informed decisions will help you save and buy smarter. To learn more about using online calculators for your financial planning, please click here.
- Learn from your mistakes. We all make mistakes, and as you tell your kids, what's important is that we learn from them. If your daughter hangs her doll out the window, you can bet next time she'll keep the doll (and her hands) inside the car! If you miss a monthly payment, set up a series of reminders or use Navy Federal's automatic Bill Pay for your monthly payments so you don't miss another.
- Be an entrepreneur. Whether kids have a lemonade stand, run a babysitting business or shovel snow for your neighbors, they're always thinking of ways to earn money. As an adult, you can be innovative, too and turn your great ideas into cash flow by launching a startup or small home-based business. Too adventurous? Start small by setting up an automatic transfer into your savings account bi-weekly, and your cash flow is sure to increase!
- Don't be afraid to ask questions. As a parent, you know what it's like to answer questions repeatedly. (Are we there yet? Can I have a sleepover? Why?) Don't be afraid to ask questions of your lenders to make sure you understand all the terms of any financial agreement you enter into.
- Security blankets help you sleep. Just like a blanket or favorite teddy bear can help your kids feel secure at night, putting money into an emergency savings fund will ensure you sleep well, too. The idea that you've got money saved up in case of an emergency is one less thing you need to worry about while you're counting sheep.
- Treat yourself. You reward your kids with an ice cream sundae when they finish their veggies. Don't you deserve to treat yourself every once in a while, too? Go ahead and spring for those shoes you noticed on sale; just make sure you pay off your credit card so interest rates don't end up costing you more than the shoes!
- Don't let time slip by. It seems like yesterday, you were cradling your newborn baby, and now she's packing up for college. All parents will tell you that time flies by too quickly and that you need to make the most of every year because your babies are only young once! Well, the same idea goes for saving for retirement. Even if retirement seems far away, it will be here before you know it. Take advantage of the time you have now by increasing your IRA contribution, even a little bit, each year.
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