The BEST Financial Gift we could give our kids is not being financially dependent on them later in life while they try to raise and educate their own kids.
Most parents love their kids and would die for them. My question is always – “Does it?” Here are some decisions that come with good intentions, but can actually have bad consequences for our loved ones.
- PLUS the parent receiving the student loan must repay.
There is a reason, because it is a measure of the extent to which the leadership lends itself to your student’s name. Because they don’t have a heavy burden out of college, and most people coming out of college can’t afford to pay more than their federal loan limit.
Many parents struggle to afford college AND save for retirement at the same time. If you don’t have enough money to do both, it’s probably unwise to expect your children to get a parent Plus Loans than they signed up for.
Remember that if we didn’t save enough for retirement and depended on parent loans to get the kids through college, then we would be relying on help with our kids’ ages. Is this what we want? Thank you very much Father!
- Whole life insurance (what kind of bad)
A whole life insurance product is great if it’s structured properly, but on the parents. I have seen some plans with healthy kids bought from the same companies that buy baby food. These are horribly ineffective thoughts and, in most cases, bad ideas. Generally, insurance for young kids is much more expensive than insurance for parents.
First, we must consider what the purpose of the insurance is. If we buy insurance with the kids, this should only be paid out if the child dies, that is, it is paid for your future grandchildren for 2 generations! Is that what is going to happen? Let’s consider who we want to protect?
Typically, we want to guarantee the parent who is the main bread winner, so that if something happens to them, the spouse and children will not have to deal with the devastating financial consequences. In this way the family will leave a positive legacy and not a burden.
I’m a big advocate of property insurance, and I personally practice what I preach so feel free to give me a call if you want to see what might be right for your home.
If you want to buy a timeshare, do this for yourself and get a long time, but don’t burden your kids with it.
Here is something to think about;
* Internal Revenue Service your timeshare, and rate all timeshares as cheap.
* No legitimate charity wants your given times. AGE
If so, why do we think our timeshares have any value? It has to be paid for every year, and most people can’t donate their time. Don’t burden your kids with the fear of buying for them. With today’s technology and Airbnb we have so much flexibility without the burden.
- Taste the champagne in Beersheba Donec
If our children leave our home with the expectation that they can all go to a private school, go on vacation to Hawaii or France every year, shop in expensive stores and drive cars, then we are probably enslaving them.
The first attack comes when they see their first paycheck, they wonder why they have gone so far for taxes and other deductions, and to realize that they have to pay for their car and place to live. Sometimes we love to spoil our kids too much, but exposing them ends up hurting them. The worst thing is when they know we can’t give up because we don’t teach.
- Parent Financial Insecurity –I saved the tougher one for last.
Do we always remember the lesson when we fly? “In the unlikely event of an accident, put your mask in front of you to help your children” This should be the way with our medals.
I talk to families all the time who have parents who are not financially stable, who have not been able to control their expenses, who have not saved enough for retirement, or who do not have life insurance when needed or Long Term Care, who are in such bad financial shape that their children spend their nights worrying about their parents.
One of the most wonderful financial gifts we can give our kids is personal financial security. So we can be a blessing to our kids and not drag their lives down.
To counter the negative notion that we might notice what we shouldn’t do, here are some things we should think about.
Five smart financial habits to teach our children early in life – they can set them up for future success.
Someone once told me – the way to teach our kids the value of money is to borrow something from them
- A miracle of composition – the earlier the better. As parents, we often wish we knew this
- We value what we earn, not what we are
Granted – Given or earned? Grants aren’t just about money, but the lessons we were able to teach our kids in the process. People learn a lot when things are earned through hard work and dedication, rather than just being given something. My daughter once worked really hard to earn a surfboard by walking around our neighborhood selling cookie dough for her school. I’ll never forget when I asked how many people said “No” to him, he told me “I don’t know father, I’m just focused on getting 75 people to say “Yes”
It is a useful document to understand how effort is translated into gains and this in turn is translated into behavior to become a “merchant” in life.
- Teach your kids how to lose money
Even losing money. You see, no matter how many courses on foot or in college they take around personal finance, there is no greater teacher of all in our lives than not making our money until we experience losing some money.
Whoever is the guardian we help them with when we set up the system, maybe we could get them back safe in some type of investment and sit quarterly with them to track and teach them how their investment is performing.
They have them as one of their company’s favorite stocks and even if they lose money, they work in the long term to earn interest on the investment and how to make a good investment decision.
- Consumers – Ask questions first
- Do I want this?
- Do you need anything?
- Can I afford it?
If the answer to any of these is “No”, you should probably think twice about it.
We have saved money only once, and we use it because of want
One thing I’ve learned in life is that it’s really helpful to give early when you’re not doing much, rather than trying to start giving when you’re doing a lot. It just seems like a lot to get into when it’s a high number, but as it grows, it becomes a great habit and rewarding.
I go back to the first sentence – Most parents love their kids and would die for them. My question is always – “Does it?”
Would you like to discuss how you can make wise decisions about retirement planning and planning for your family? Please do not hesitate to contact us Dave Cohen that a no-cost consultation should be arranged.
You can see more about my role as a Financial Advisor with SageView Advisory HERE
Tel: 714-813-1703
dcoen@sageviewadvisory / [email protected]