The correlation between money and health has become clearer in recent years. Studies have shown that people tend to adopt the same attitudes towards their health and their wealth whether they be poor choices, excess or failing to plan ahead. Additionally, good finances are important in providing the health care needed to remain healthy, especially in light of the rising costs of health care and decreasing number of Americans with health insurance. For your future and your kids future, consider reviewing your family’s financial habits, and looking for ways to improve.
Importance of Saving
Early on we were all taught about the importance of saving for a rainy day. As the economy boomed people felt relatively secure in living frivolously paycheck to paycheck. The recent recession has offered some hard taught lessons about planning for emergencies. Financial expert Suze Orman recommends having at least an eight month emergency fund for such circumstances as those the economic downfall brought.
Now your kids might not totally understand a need for a cushion to make sure the mortgage gets paid. But they may understand unexpected pitfalls like running out of cookies or cell phone minutes. To further reinforce this try playing a game like Life or Monopoly to further emphasize how you must plan for the unexpected and sometimes unfair.
Responsibility and Fees
Convenience, whether at the local minimart or the bank, comes at a price. Have you ever added up how much of you money has been wasted on late charges or ATM fees? If not now is the time to do so. Now think about how many others ways that money could have helped your family. From an extra night at the movies to a full vacation, that money could be better used to improve your family life. The fact that you have these charges is a sign of irresponsibility. Begin by setting a better example for your kids and start planning accordingly to avoid extraneous charges. In order to drill it into your kids, try the opposite- try assessing them charges when they are irresponsible. If they learn now, in a supportive environment they will never develop the bad habits when they are dealing with a more significant amount of money.
Credit Card Debt
Learning to live within boundaries is an important part of growing up. So why is when we grow up we decide to bend the rules and spend money we don’t have? This is an important lesson that adults need to review. Credit cards are a great way to create a credit history and build a FICO score. They are also good to have for emergencies. But carrying a monthly balance will hurt your credit score and can easily turn into significant debt. Start by reviewing your monthly earnings and expenditures. If you have credit card debt at least start to live within your means to avoid augmenting the sum. Be honest with your kids as to how the household spending can’t exceed the household earnings. To set an example you need to also live on an allowance like you expect your kids to.
As was mentioned, saving is necessary for financial well being. But investing is even better. Compounding interest and the rate of return on investments is a miracle of time. The sooner you and your kids start investing, the larger the sum of money that will be available when needed, like at retirement. Every little bit helps so take some time, sit down with your family and start an online investing account. When investing what you would spend on coffee for the week, your family and make it an inexpensive but educational game that in the end just might earn you all a nice sum of money.
By examining your financial habits and working on them with your kids, you will all benefit. Self control, responsibility and organization are all life skills that will benefit your family throughout their lives from their health, to their wealth and even to their ultimate happiness.
Teach Your Kid To Save. http://www.fool.com/personal-finance/saving/2007/03/16/teach-your-kids-to-save.aspx. Accessed November 16, 2010.