As parents, you want to ensure your kids are well-prepared for adulthood with the skills they need to achieve their goals and find happiness. Financial security is part of the picture, but it can be difficult to decipher the best way to help them get there.
While we can’t guarantee your child will become a millionaire, these tips can help up their chances—and, at the very least, set them on a path of solid financial literacy, which is a worthy goal in itself.
Set a good example
Children naturally pick up on the habits and mindsets of their parents. By demonstrating the importance of managing your money wisely, they’ll take these lessons to heart. Do your best to live within your means, be responsible with pay cheques and credit, and show how you put money towards a goal. Remember that actions speak louder than words! Making them a part of weekly or monthly budgeting will actively show them how to manage their finances and normalize that disposable income and savings fluctuate. And if you make money mistakes? It happens to the best of us. You can explain what steps are needed to fix the problem, reinforcing that financial missteps happen and are not shameful.
As they get older, providing them with an allowance, a debit card, and access to financial apps can help them learn to independently manage their own money. A great place to start is walking your child through the basics so they’re aware of their balances and limits. Practicing planned spending with them is also a good way to teach them delayed gratification, and or how to use and pay off any credit products responsibly. Many new money management apps and accounts for kids have monitoring features so you can keep an eye on their expenses. And set spending limits. Money is a vital, everyday part of our lives—it shouldn’t be taboo with your children!
Impress the importance of investing
There are no shortcuts to a child acquiring a million dollars unless you’re born into wealth (or win the lottery). And even in those instances, having a grasp of investing and money management are essential to maintaining that wealth for generations. Teaching your little ones that it’s possible for anyone, them included, to attain a very comfortable financial cushion through investing is important in building their relationship with money. Regularly putting money aside in a balanced portfolio, and showing your children the ropes, can help you achieve the steady returns needed to provide your child with security—and even wealth—in their later years.
If your children want to learn more about investing, you can look into age-appropriate books and resources. They can also sign up for a virtual stock simulator program, where they can make trades and try their hand at more active investing, without risking any real money.
What does your child want to learn more about? What problems do they want to solve? Self-made millionaires are often dynamic, out-of-the-box thinkers with solid business acumen. Let your kids indulge their interests and exercise their entrepreneurial spirit.
This might include allowing them to dabble in extracurriculars and hobbies or letting them start their own small business like a lemonade stand or dog walking. They’ll be exposed to new and novel experiences and find opportunities to take their interests to the next level.
Build social skills
Often, it’s about who you know, not what you know. As an adult, your network can help you land opportunities, provide direction and give insightful advice. While there’s no need for your child to attend networking events in grade school, teaching them how to build solid, sincere relationships with their peers will serve them well wherever they go. These soft skills are an asset in any workplace or professional setting.
Kind and engaging people also tend to live happier, more fulfilled lives, which is the ultimate objective. Either way, ensuring your child has the soft skills to stand out can be a secret weapon— especially if they ever need to pitch a venture capitalist.
Practice a growth mindset
Setbacks and difficulties are a part of life, even for the wealthy! Many have experienced numerous personal and professional failures before hitting their stride. Help your child overcome disappointments and encourage them to keep working at the goals they’ve set for themselves. Sometimes, it might mean doing something a different way or starting over. But the success stories come from those who keep trying.
With hard work, the right attitude and a healthy dose of financial literacy your child can achieve their dreams, even if it’s becoming a millionaire!
Embark is Canada’s education savings and planning company. The organization aims to help families and students along their post-secondary journeys, giving them innovative tools and advice to take hold of their bright futures and succeed.