Times have changed and so have people, livelihood, and economy. Out of all important factors, the change in the financial outlook of kids towards money is worth observing and learning. These factors will help strengthen kids financially in the long run.
1. Treating kids as entrepreneurs
It is important for kids to understand the importance of money at a young age. And parents are best suited to help kids in this matter. Previously parents used to teach kids to save money in piggy banks. However, saving being an important matter, parents nowadays categorize savings for holidays, toys, vacation, college, etc. Kids feel responsible for this approach and managing money becomes fun.
2. Use of technology
Kids are quite tech-savvy today in comparison to yesteryears. Adding to this is the world of finance management apps. Kids can choose from numerous financial apps available for both Android and iOS platforms. Using apps to track daily expenditure and budgeting is a very healthy habit among youngsters today.
3. Balancing education and money
Most of the youngsters are avoiding taking up debt for education. They are well aware of how America is suffering from $1.5 trillion Federal Student Loan Debt alone. Approximately one-third of every adult of age group 25-35 have student loans. Having an eye on this burning issue, kids plan on doing part-time jobs or freelance and study simultaneously to avoid the debt trap.
4. Realizing money doesn’t grow on trees
Today’s parents are more focused on explaining kids about the reality of money management. Budgeting or frugality does not mean you should stop shopping or stop meeting friends at a cafe. Rather it means you should keep a check on your expenditure and spend according to your budget. When parents use cards at an ATM to pop out bills, kids do not realize that the stock of money in the account is limited and has been kept safe in the bank after days of hard work. It is a good practice followed by parents nowadays to use cash when they are with their kids instead of cards. This, in the long run, has helped to groom children properly for managing their money.
5. An inclination toward simple investments
Today kids are more into simple investments. For example, they are heading to index mutual funds that have low expense ratios and are designed to track individual indexes. Also, there are exchange-traded funds and target-date mutual funds that attract these youngsters.
Nowadays, kids are more interested to learn and imply the process of saving money, budgeting in a proper manner, and living a financially secure life. This is definitely a positive change and will definitely help in building a better tomorrow, the American dream.