How to Raise Financially Independent Kids

A Home finance or children savings scheme concept showing upwards financial growth with coins
A Home finance or children savings scheme concept showing upwards financial growth with coins

As parents, we all want our children to grow up and be successful. For some, this means going to college. For others, this may seem like a business or starting a family. No matter what our definitions of success are, most parents want at least one common brand of success for their children: financial independence.

What is financial independence?

Financial independence means that adult children no longer need financial support from their parents or guardians. This does not mean that a parent has to completely cut off their child; they can still provide some form of financial aid. This just means that a child can fully support his financial obligations without depending on the support of his parents. While most parents expect their child to reach this point in life sooner rather than later, for most young adults this does not happen by the time they turn 18.

How can parents raise financially independent kids?

While your young children would not (and should not be) financially independent of you yet, helping children grow up knowing the importance of money management is the first step on a lifelong financial health journey. Teaching your preschoolers the value of money, your children how to spend responsibly, and your teens how to save wisely will do wonders for their financial growth. An important aspect of this is also discussing the danger of debt, as well as how interest rates and monthly payments work.

Make a plan

Along the same lines, make a plan with your son or daughter! It is okay to work with your child and create a plan together to end your financial support. You don’t want to inadvertently harm your child by allowing him to make decisions that don’t always focus on his financial security. Whether your child is dropping out of school to pursue a different career path or graduating from college, you must increasingly invest in your financial well-being and strive to be self-reliant. While this does not mean that parents should abruptly put their adult children out on the street, it does mean that they must own their own goals and plans to become self-reliant.

Set limits

When you first sit down to make a plan and as time goes on, it is important to set limits and stick to them. Setting limits on the financial assistance you are willing to provide will help your child plan ahead and make more “grown-up” decisions while keeping them from feeling frustrated or even financially burdened. If you always come up with a solution every time your child needs help or is in trouble, you won’t learn the importance of meeting his needs while setting aside your wishes for his future. While it may feel good for parents to do this, the implicit (or even explicit) message to the child is: “You are not competent enough to do it on your own.” At the same time, this will only lengthen the time it takes for them to truly achieve financial independence. It is also important to note that your child may experience a setback if a crisis arises in his life. These situations can include problems in college, a difficult breakup, or even health problems. This is acceptable as long as there is a plan in place for the adult child to become financially independent once again.

As parents, we must change the way we respond to our children. You shouldn’t try to change them. Stop the flow of money. Put an end to our negative behavior. “For so long we were in the midst of drama, chaos, and crisis,” says Bottke. “I had to stop letting my son push the buttons and I needed to stop accepting the consequences of his behavior.”

Gather support from people

Chances are you have friends or loved ones who have already experienced what you are going through. It’s okay to ask for their support or guidance. Knowing that you are not alone in this process will help you tremendously.

Implement Rules and Limits

Sit down with your child, make a plan, and discuss how you will follow through together. Give them a specific date that marks when you will stop supporting them financially. Creating a specific timeline with set dates is a great way to stick to a plan, and it can also be a great learning lesson for your kids.

Trust your instincts

If you have the feeling that your child needs financial support at a specific time or that he or she is not financially capable of supporting himself, listen to your instincts.

And finally, give it all 

You can’t control every aspect of your child’s life. Trying to solve their problems will only prevent them from growing and becoming independent. You need to love and support them, but you should still avoid enabling them whenever you can.

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