How to Help Your Children Become Financially Independent
As a parent, one of the proudest moments you’ll ever have is when your children’s dreams and adult lives come to fruition, watching them achieve what you once did. In recent years though, those accomplishments that you may have considered normal are becoming increasingly elusive as both competition and prices rise across the economy.
Buying a home, starting a family, and even getting your first real job are all coming much later in life now. What used to be normal at 21 is no longer so, and these achievements we used to consider normal are harder to come by.
Some data on the matter
Work & independence: Back in 1980, 64% of 21-year-olds in the U.S. were working in a full-time role, compared to just 39% today. 42% of them were also financially independent, whereas now just 25% can say the same.
Home & family: 62% of 21-year-olds were living on their own in 1980, but 51% are now. 18% of them had a child, and only 6% do now. 32% of that group was also married back then, and yet now only 6% can claim the same.
As a parent, how can you help?
Ironically enough, getting your own finances in order is arguably one of the best ways to be able to help your children down the line. If your own financial life is stable, you’re able to retire, invest for your kid’s college, and save, you’ll be in a much better position to help them out later in life.
Gift them a credit score: 53% of young adults aged 18 to 24 didn’t have a credit card as of late 2021 — this is risky. Like it or lump it, credit is almost a necessity in modern finances, and it opens many doors that may otherwise be locked. As a parent, you can easily gift your child a credit score (eventually) even if they aren’t old enough to apply by making them an authorized user on one of your accounts. Just remember, your creditworthiness will reflect on them, so act accordingly.
Start showcasing the importance of good financial habits early on in your kids’ lives. To some extent or another, we are all a product of our environments, especially as children and young adults. By instilling good financial values and habits in your kids when they’re young, you significantly increase the likelihood of them mirroring those behaviors in adulthood and up their proclivity to success in the process.
**Blog Post Courtesy of The Gist by Finny