By Sylvia Lim CGA, CFP
Before they head for College…
- Realistic money budgets
Teach kids how to live within their means. Show them how to set realistic money budgets and factor in all their spending. For example, a budget for a movie night out with their friends may include the price of bus fare, movie ticket, popcorn, and drink. If the total is too much, show them how to revise it to fit within their means. The answer may be giving up on the popcorn and/or drink, or movie night out only when they save enough to pay for it.
- Pay off credit card monthly balance
Teach kids to habitually pay off their monthly credit card balance, without exception. Every bank and credit card company will be sending your child credit card offers before they even start their first post secondary class. If they’re not careful, they may wind up deep in debt within a few months.
- Differentiate `needs’ versus `wants’
Teach kids to tell the difference between what they really need versus what they want. The success of mass media marketing today blurs the line between the two. Kids need to understand that giving in to impulse buying will mean missing out on something more important later, such as a more financially secured future.
- The overnight rule
Teach kids to think overnight before making a major purchase, that’s anything over $100. Even though they can afford it, the overnight rule is a good habit to learn. Better still, encourage your child to consult with you before buying anything major.Find more saving and finance tips in Sylvia’s books–visit the Books page.