Building and creating generational wealth for children is a long-term process, and it is best to start as soon as possible. From a young age, children are taught all kinds of financial literacy, foundations, life insurance, 529 education plan, various savings accounts, and the possibility of investing children’s funds in stocks and assets.
There are a variety of options and offers for the best debit cards for kids, we’ll walk you through what they should include to best teach your kids all aspects of financial literacy.
The origin of money
Children must respect money, know how to take care of it, and how to dispose of money and spend wisely. Many children think that money is abundant, which is not the case at all. Children must be aware that money is earned through hard work. And that money does not come from magical devices like ATMs.
Needs and desires
The difference between needs and desires is big, the necessary expenses include rent, mortgage, fuel, food, clothes, shoes, and all other expenses that arise during the month that parents have to pay. Children’s wishes can be fulfilled sometimes on special occasions.
Investment in education
Children must be educated, well-read, and have complete knowledge of all types of finances. There are different options when it comes to education. Many parents save money and leave it in separate accounts for education expenses as soon as the child is born. College duties and attending certain colleges are not at all cheap, especially now that everything is getting more expensive every day. If your child gets good grades and excels in some school subjects, he can earn extra money by tutoring other children.
This sensible financial plan is intended for financing only those people who attend college. There are two different ways of this plan, collecting money according to today’s price in advance or investing this money in approved and predicted stocks and markets by the faculty. Many choose the second alternative because they invest that money and every day the prices go up, so if you collect money earlier, education may become more expensive and you will lack money. These funds may not be used for anything other than college expenses, rent, purchase of books, semester payments, and all necessary expenses that fall under educational expenses.
Investing in various stocks and companies
With a credit card for children, in addition to numerous opportunities for learning about finances, you have the option of investing in stocks and brands. At any time, thanks to the mob app, you can monitor the state of your shares, whether they are increasing, decreasing, or stagnating.
A diversified portfolio of investments
Children mustn’t stay in only one type of industry, of course in the beginning they can be various shares of the same branch of industry. However, later you will want to broaden your children’s horizons and encourage them to invest in various types of industries and their various branches. In this way, in addition to the fact that children enrich their portfolio, learn new things, and have more various types of income, unless, God forbid, certain stocks from a specific industry fall in market value. Once children have mastered the basics, they will choose where and in which stocks to invest. What is innovative is that children can invest their money in well-known companies such as Netflix and Apple, as well as many others.
One of the options that many parents choose is to open a trust fund in the name of their children. A parent or guardian has the right to open a fund in the name of their children, with the fact that they can establish age restrictions on access to the funds in the fund. Depending on which country you are in, different rules apply, sometimes children can access the funds of the fund as early as 18, 21, or even 25 years old. Parents can dispose of the money as they wish, invest it in the market, invest in various stocks, or save for their children’s first future property. There are also restrictions here where the account must be active for at least five years to be able to access the funds.
Make a plan
No one can fully account for all costs, because some arise beyond our control. However, children must have a detailed, clear plan and a goal that they will strive to achieve. It is of crucial importance that the children have a motive that they will strive to fulfill, and stick to the plan as much as possible. Research has shown that children whose parents raise them by teaching them financial literacy and all segments from an early age later become accomplished, successful, and debt-free adults.