Parents are never short of free, often unsolicited, advice about all things in their kid’s lives like dating, work, and even money. But unfortunately, for many parents, the topic of money is taboo – which is an avoidable disservice to our children that can leave them lagging behind, especially when you factor in the societal impact financial illiteracy has on all aspects of our lives.
To help prepare recent grads for the financial realities entering their “adult” lives, Alison Norris, Advice Strategist and Certified Financial Planner at SoFi, a personal finance company, suggests parents make the most of the kids being home for the holidays by having the “money talk” to make sure they’re “adulting” right:
Here are five money goals for your kids, and how you can help them accomplish them:
1. Goal: Establish healthy spending habits. Having the discipline of setting money aside for bigger and better things is a wonderful habit to encourage early on. In order to pay for future goals, young adults need to master the art of delayed gratification today.
2. Goal: Become a good credit risk. Establishing a good credit history helps recent grads become financially credible to lenders when it is time to take out an auto loan, mortgage, or replace expensive debt. Akin to school transcripts, recent grads should know how to improve their credit scores and understand the role credit plays in their lives.
3. Goal: Control student debt before it controls you. Americans default on their student loans every 28 seconds. Together, help your children understand the financial implications of their degree and create a debt repayment plan.
4. Goal: Invest so your money makes money. Investing is one of the best ways to grow your savings and create your financial independence. Unfortunately, it’s also one of the most misunderstood financial topics, one that causes a lot of unnecessary stress and anxiety.
5. Goal: Make a difference with your dollars. Most recent grads are impassioned and unselfish. While they want to change the world, they often lack the capacity to do so. Allocating a percentage of your hard-earned dollars into a giving bucket results in a multiplier effect—where both giver and receiver are benefited.
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