Amid a wave of uncertainty due to changes in the U.S. economy, many parents may be asking themselves the same question: How can I help my child build a financial foundation without hurting my pocket?
This could sound rare, but there are several options for parents or guardians of minors who want to provide financial education without having to save or invest any money.
Financial literacy is not a common subject taught in schools, especially if students don't enroll in an economy-related career, so parents play a key role in their knowledge in this area.
Andre Dos Santos, a financial advisor who works in wealth management, shared a list of tips aimed at both parents and teens who haven't started planning a financial foundation for their future.
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- Keep track of your monthly expenses: This may sound repetitive, but fixed monthly expenses are an important part of your pocketbook. If you pay for subscriptions like Netflix, Spotify, Hulu, and more, the best thing you can do is look for student discounts, make groups with your friends to get the cheapest rate, and always try to cut unnecessary subscriptions.
- Part-time jobs: Take advantage of your free hours in the day. This is the time when you can make money and experience to add to your resume. If you live with your parents, you can help with what they need. Or if not, save it.
- Learn about credit and start building a credit history: Depending on your preference, you can start by reading books, listening to podcasts, or watching YouTube videos. This will help you little by little to take action to build your credit.
- Don't compare yourself to people around you: Buying the newest car that is out of your reach won't make you cooler -- it will only set you further behind in your goals.
- Create an emergency fund: Create a savings account that will cover three-to-six months of your lifestyle expenses. You need to have this fund in case of an emergency or unemployment.
- Ask for help from professionals: If you are unsure if your financial education is strong enough, seek professional help. Ask teachers, parents, or your parent's friends. This will help you avoid common mistakes.
High school and college students' decisions will either boost or hurt them in their adult lives. Dos Santos recommends looking for ways to avoid getting a student loan. It is preferable to avoid them since it could delay financial stability.
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Some of the books recommended by Dos Santos are: "Rich Dad Poor Dad," "One Up on Wall Street," "Think and Grow Rich" and "The Intelligent Investor."
Additionally, there are free or paid courses that can serve as a guide depending on your needs and interests, such as Harvard Business School courses, Kaplan courses, and LinkedIn courses.
Even though someone can't own a credit card before turning 18, there are ways parents or guardians can start building a credit history for them. It can be done by adding children to credit cards as an authorized user.
Faride Narciso, a mother of three who works as an investment advisor, says that the key to success lies in educating young people to save from an early age.
"Saving and creating the habit of not spending everything you have will help you live freely in the future," Narciso said.
Narciso said she encouraged her children to learn to be efficient with money, recommending they always look for the best loan options and credit cards with the lowest interest rates.
"Young people should avoid spending more than they have at all costs," Narciso said, "That's why I always taught my children to save part of the money I gave them on a weekly basis."
It's never too late to teach your children and relatives to start making better financial decisions. Narciso assures that the foundation of personal finances is created at home, so parents should keep that in mind to ensure a better future for their children.