(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)
Parental responsibilities in the current scenario is quite challenging with the kids catching up very fast than what we could imagine. They also grow up with unlimited ambitions and aspirations. It's the duty of the parents to regulate their thought process as it involves huge financial implications. It is also crucial to teach them the values of life with reference to money . Let's look at some the key points here on financial parenting:
Kids are growing fast and ambitious. It's good to have reasonable, attainable ambitions, but with the kind of peer pressure and other factors, kids tend to develop higher level of expectations from their parents. It is essential to manage their expectations and moderate them in an appropriate way. Because unmanaged expectations can imply a huge financial burden.
3. Openly communicating the family's financial realities:
Make them understand the family's financial realities which can develop a healthy financial atmosphere @ home.
4. Desisting from huge and unmanageable financial commitments:
It's not a great idea to shoulder huge and unmanageable financial burden for the kids as there are better ways to fund their goals and aspirations.
5. Teaching them the importance of financial independence:
Kids must be taught to be independent and more so financially from the younger age. They must also know what costs are incurred on their school, college education and how are they managed to be paid. Bottom line is that they should not think money is easily made. They must also be encouraged to look at sponsorships and grants to reduce the financial burden of the parents. It's a good idea for young adults to work as interns and trainees which gives them the responsibility of earning and spending the money on their own.
6. Financial planning for the children's future:
Planning your child's future becomes essential, given the fact that the costs are escalating in the space of education. Planning also ensures that the financial burden is spread over the time which eases the stress when they grow up and get ready for higher education.
7. Planning the distribution of wealth to the children:
On distribution of wealth to the children, billionaire Warren Buffet once remarked “Enough so they can do anything, but not enough so they do nothing”. The prophetic words should be a great eye opener for all who would want to distribute their wealth to their children. Wealth distribution should focus on children to earn it and not own it. Create wealth wisely, but distribute it responsibly...
(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)
Parental responsibilities in the current scenario is quite challenging with the kids catching up very fast than what we could imagine. They also grow up with unlimited ambitions and aspirations. It's the duty of the parents to regulate their thought process as it involves huge financial implications. It is also crucial to teach them the values of life with reference to money . Let's look at some the key points here on financial parenting:
Seven habits of highly effective financial parent:
1. Preaching financial values to the kids:
Preach them the life's values particularly the financial values as they never carry an expiry date. Story telling can be a very effective tool to preach such values at their young age. Values such as
a) Saving money.
b) Helping others.
c) That there is a life beyond money.
d) That money is not the only thing in this world.
e) Difference between " I want" and "I need".
Just to mention a few...
2. Moderating and managing their expectations:
Kids are growing fast and ambitious. It's good to have reasonable, attainable ambitions, but with the kind of peer pressure and other factors, kids tend to develop higher level of expectations from their parents. It is essential to manage their expectations and moderate them in an appropriate way. Because unmanaged expectations can imply a huge financial burden.
3. Openly communicating the family's financial realities:
Make them understand the family's financial realities which can develop a healthy financial atmosphere @ home.
4. Desisting from huge and unmanageable financial commitments:
It's not a great idea to shoulder huge and unmanageable financial burden for the kids as there are better ways to fund their goals and aspirations.
Kids must be taught to be independent and more so financially from the younger age. They must also know what costs are incurred on their school, college education and how are they managed to be paid. Bottom line is that they should not think money is easily made. They must also be encouraged to look at sponsorships and grants to reduce the financial burden of the parents. It's a good idea for young adults to work as interns and trainees which gives them the responsibility of earning and spending the money on their own.
6. Financial planning for the children's future:
Planning your child's future becomes essential, given the fact that the costs are escalating in the space of education. Planning also ensures that the financial burden is spread over the time which eases the stress when they grow up and get ready for higher education.
7. Planning the distribution of wealth to the children:
On distribution of wealth to the children, billionaire Warren Buffet once remarked “Enough so they can do anything, but not enough so they do nothing”. The prophetic words should be a great eye opener for all who would want to distribute their wealth to their children. Wealth distribution should focus on children to earn it and not own it. Create wealth wisely, but distribute it responsibly...
(The author is the Founder and CEO of Money Avenues, a Wealth Management firm based in Chennai. Feedback can be sent to reachyourviews@gmail.com)
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