fbpx

Setting A Good Example When It Comes To Finances

November 21st, 2016 Posted in kids and money, teaching children about money, Uncategorized
No Comments

Taking care of your finances is one of the most important things you’ll ever do. Being lackadaisical with the money that you have will only leave you in sticky situations, such as in debt or worse, bankrupt. Another crucial thing to think about, is how your family handle their finances. You can tell your kids all you like about how to save money or becoming financially smart, but at the end of the day, they are going to learn from what you do. Kids will always pay more attention to what you do, rather than what you say. You must set a good example when it comes to your finances. Here’s how to do it.

Start Early

Starting as early as possible ensures your kids develop the right attitude towards money is important. You can do this by making sure you use your money responsibly. It’s no use starting when they are teenagers, as they pick a lot of it up when they are very young.

handful of money image http://thefinancialfairytales.com

Credit

When You Do Talk About Money, Know How To Talk About It Properly

When you talk to your kids about money, make sure you know how to talk about it properly. You should be open with them about what you’re doing with your money, and give them advice on what to do with theirs when they have it. Speaking to them about it like adults is important. Try not to discuss money in a negative way, as many people do. Although money isn’t everything, a positive attitude towards money will help them later on in life.

Give Them Pocket Money And Encourage Them To Save/Spend Wisely

Give your kids a set amount of pocket money and encourage them to save and spend wisely. Make sure you encourage them to develop a savings habit early on. When they want to buy something, let them work out how much it will cost and whether it’s worth it.

Live Below Your Means

So many people spend more than they earn and end up in debt. It’s up to you to show your family how to manage their finances by living below your means. This means spending less than you actually earn, in short.

Credit cards image

image

Plan Your Purchases
Planning your purchases rather than buying on impulse sets a really good example to your family. You should know you’re going to buy something a few weeks in advance so you can adjust your finances accordingly. Never buy something without mulling it over properly first, as the novelty can quickly wear off and you end up being a consumer for the sake of it. Act like you have to wait for a check to cash. Although, you can get them taken care of pretty quickly these days. See this link for more references.

Try Not To Use Credit For Non Emergencies

Credit can be useful, but using it for non emergencies can be a bad idea. You could potentially end up in debt with a lot of interest to pay, and kids usually pick up their parent’s spending habits. Unless you have an emergency or it makes sense to use your credit for whatever reason, steer clear. Don’t spend money you haven’t got.

,
Read More

Should I Teach My Kids About Identity Theft?

November 18th, 2016 Posted in financial education, financial literacy, financial literacy for kids, kids and money, learning about money
No Comments

The Financial Fairy Tales Cyber Crime - http:thefinancialfairytales.com/blog

Image Credit

We’re hearing more and more about identity theft these days. But it’s rare that we consider our children when thinking about the subject. But, whether you have a child who is using the Internet or not, it is still something you should approach with all your family. In today’s guide, we’re going to take a look at why it is so important. We’ll also suggest a few ways you can teach them about how to keep their personal information safe.

Who steals a child’s identity?

It doesn’t compute, does it? Surely no one – even a criminal – would take a child’s identity for nefarious means? Sadly, it’s far from the case. There are several reasons why someone might want to get hold of your kid’s identity – and it could be a goldmine for them. With a social security number, they can apply for a passport or another type of ID card. They could set up a bank account, or even apply for a credit card. And worst of all, they can use a child’s ID to snoop on them, which could put your kids at risk.

Social networks and devices

Don’t forget that more kids than ever are now using social networks, emails, and own phones. It doesn’t take much to find out a lot about your child if someone got their hands on a phone. They could have access to sensitive pictures or messages, and use that information to blackmail your child. They could use your child’s identity to befriend another kid, and encourage them to do something dangerous. And, of course, there is a lot of information you can glean from the data left in photos posted on social networks. So, don’t underestimate the importance of talking about identity theft with your children. There are many ways it can affect them – and you. Let’s take a look at some of the things you need to consider when exploring identity theft with your sons and daughters.

Staying safe online - http:thefinancialfairytales.com/blog

Image credit

Understanding the problem

Of course, before you start teaching your child about identity theft, you’ll need to arm yourself with the knowledge. The sad truth is that many adults aren’t even aware of the danger they can sometimes leave themselves exposed to. With this in mind, here’s some tips to prevent identity theft that you need to follow. Start by ensuring that you follow the basic rule of protection – having a robust and secure password, for instance. It’s important to set a good example for your kids if you want them to follow suit. You should also invest the time to find a robust and reliable cyber security program. You don’t have to spend a fortune – there are many fantastic products out there for free. Finally, never by anything from an unsecured online store. The risk of a hacker getting hold of your financial information is just too great.

Influencing behavior

Once you start following the guidelines above, it will be much easier to teach your kids to do the same. The idea is to make these simple rules a habit. When you sign up for a service, you always create a new password. Only pay for goods when you are on a secure WiFi channel. If you start quizzing your kids about the differences between a secure and insecure website, they will soon pick it up. Don’t forget; the chances are that your child will end up a lot safer online than you have ever been. It’s much easier to pick up these habits when you are young.

The dangers of the web

The final lesson is to explain the dangers of the Internet. Kids these days spend a long time online – they even use it in schools. The trouble is, it’s like second nature to them. They are unable to see the dangers of talking with strangers or sharing information online – unless you explain them. Speak to them about how easy it is for people to give up valuable information to others while online. Use some examples – you might try sharing a picture on your account and seeing how far it can travel. Try to avoid frightening your child, however. You don’t want to teach your child that the world is a scarier place than it is. It is vital to keep things positive.

As you can see, it is imperative that you teach your children about the dangers of identity theft. By giving them knowledge at an early stage, their behavior will become habitual. Your kids will be careful, and understand when – and where – there are potential risks.

, , ,
Read More

Explaining the Value of Insurance to Children

January 27th, 2014 Posted in kids and money
No Comments

When you’re giving children an education in finance, one area that is vital to include is insurance. As a concept, the value of spending money on insurance can be a difficult one for children to grasp, but the tips below should help you illustrate and explain why insurance makes up an important part of a financial portfolio.

teaching children about insurance

Explain how insurance works

Put in its simplest terms, insurance is there to protect a policy holder and their possessions should they suffer losses due to theft or another unexpected event. The easiest place to start is to explain that insurance is there to protect the value of your things.

Give kids an example to make it easier to understand. If they have saved up birthday money or pocket money to buy something special, demonstrate the value of insurance with this item. Get them to remember how long it took to save up for that item and then ask what they would do in order to replace it if that item was destroyed in a fire. You could then go on to explain how having an insurance policy in place would provide the money to replace that item.

Talk about the different kinds of insurance

Explain the different kind of insurance policies that you have – the one for your car, your home (buildings and contents, explaining the differences between the two policies), health insurance and pet insurance. Show them how you can do a search for new insurance quotes on a site like igo4 limited. Pet insurance is often an easy one for kids to get their head around.

Show them your insurance policies

Unless kids see the policies, the concept can still remain a little vague. Insurance policies don’t really make for easy reading, but sitting down and going through say, your car insurance policy, will allow you to explain what different aspects of the policy mean and it will prompt questions from the children if they don’t understand something.

Get them to understand the consequences of not being insured

Use the example of your home and the contents within it to explain what kind of situation you’d be facing if you didn’t have insurance and the worst happened. Get them to imagine what would need replacing after a fire or flood or anything else that would require a rebuild or refurbishment of you home, and how impossible that would seem without having an insurance policy in place.

, ,
Read More

Why Teach Children About Wills?

January 10th, 2014 Posted in kids and money, learning about money, Uncategorized
No Comments

image of willTeaching children about all aspects of finance early in life is important, but it needn’t be boring. The trick lies in getting children to understand the whys and wherefores of money in a way that is both fun and which will carry them through life. This isn’t about attempting to get rich; rather, it’s about instilling in them the knowledge that the sensible management of money can help bring about freedom, independence and peace of mind.

As part of this overall process, it’s also important that children understand the whole principle of inheritance. In this way, they will be better prepared for their independent financial lives when the time comes when they do inherit money – and it will help develop in them a sense of the permanence of the value of goods, property and investments.

This is a desirable thing for most parents to achieve with their children. But it’s very important not to confuse this educational process with any sense of greed or materialism; it’s a fine balance which wise and far-sighted parents should be able to achieve. And there are fun ways this can be achieved – with plenty of resources on this website to investigate.

But when it comes to leaving legacies and instilling an understanding of this whole area in children – the process is a little more delicate. Most children instinctively understand, by the time they reach somewhere around double figures in age, that life is fleeting. At this age, they’re beginning to understand the permanence of death. They’ve usually had first hand experience of a grandparent or other family member passing away – or someone else close to the family – and understand what it’s all about.

Around his sort of age, it’s perfectly sensible and natural to talk to children about things like wills and probates – and to help them understand what happens after someone’s death – to all their belongings and assets. It’s easier to talk and think in terms of something that will mean something to children rather than a person’s entire estate. There may even be a keepsake that a relative or friend has bequeathed to a child – and this can become a pleasant and happy memory; a nice way of remembering someone fondly after the initial period of grief has passed.

It’s also a good way of understand the process of bequeathing things in the way you want them.

Overall, teaching children about wills is a natural part of understanding the basics of finance in a way which will help them in later life. The knowledge that they will inherit something at some point in the future – but not to rely on such inheritance – is also helpful in allowing children to come to terms with the one inevitability of life – which is, of course, death. But instead of being in any way morbid – this knowledge should help set children’s minds free to appreciate the present and to always carpe diem whilst simultaneously being sensible with money. As the saying goes; live as though you’ll die tomorrow, but farm as if you’ll live forever.

, ,
Read More

Child Life Insurance

July 15th, 2013 Posted in kids and money, Parent Advice
No Comments

There has been quite a bit of press recently on the subject of child life insurance. It is understandable an emotive subject. No parent wants to contemplate something happening to their child, but rather like making their own will or having adequate coverage themselves, child life insurance can provide peace of mind. Consequently, more and more life insurance companies are offering child life insurance whether as a separate insurance contract or as an additional benefit for those people that buy life insurance policies to insure their own lives.

Advantages of child life insurance

Purchasing child life insurance has some advantages that could be taken into consideration.

Future Planning – First of all, the average price of child life insurance is just £5 a month. For £60 a year the parents can buy the child a guaranteed insurability option in the future. After the child reaches adulthood, he or she can buy a new cheap life insurance policy from the same life insurance provider or renew an existing one usually at a lower premium than a new customer.

Family Illness – Similarly, child life insurance can be useful where there may be a long family history of illnesses such as diabetes or heart attack. It can provide a solution to finding affordable cover as an adult.

Financial Planning – Some child life insurance programs have saving options attached to them. This means, that a fraction of premiums are used to save the money and invest them. This sum saved can be used for children education or to cover living expenses.

Disadvantages of child life insurance

Critics argue that life insurance for children is an unnecessary thing and life insurance providers are looking to take advantage of parents that love their children.

Lost Income – Traditional adult life insurance provides cover for loss of income and in general children do not generate any money. Therefore unless they are future sporting or acting stars covering their lost earnings will not be necessary.

Other critics will argue that a person does not necessarily need life insurance until he or she takes out a mortgage or becomes married with children of their own. Until that time a person will usually be working and, as a result, many jobs will insure him / her. Therefore, they believe that guaranteed insurability option, mentioned above, is not necessary.

Free Healthcare – Unlike other countries where a long illness may run up substantial healthcare bills, in the UK this is unlikely to happen.

There is an interesting article on the topic of this and what happens to students loans on the Guardian US Money blog

Advice for choosing child life insurance policy

For those parents that decided to buy life insurance for their children after all, experts offer some advice. First of all, often the cheapest option is to buy a term life insurance contract for 20 years. What is more, it is advisable to make sure that the contract is renewable and convertible into whole life insurance policy. Furthermore, some life insurance companies do not offer child life insurance cover and a result it is wise to consult a financial broker.

The Lloyds of London’s website is a good place to start.

Last but not least, it makes sense for parents to be insured themselves fully first. One of the biggest mistakes is that parents search for life insurance for their children when they do not have life insurance themselves.

,
Read More
Older Entries
Newer Entries