Are you a brand-new parent? Or you have children for a while or considering to have them?
You would have likely started thinking about the best for your children, and planning their future in advance will definitely aid in preparing you for many stages of your life; and also, those kids in your care. But have you thought about how you can smooth the process of your children (Generation Alpha or Generation Z) in getting ready for their own financial future?
There are plenty of things parents can do now to be financially prepared for their children’s future, and getting them ready too. The best plan is a plan that covers all critical phases of child’s life like education, tertiary education, health care, or even family goals; establishing your child paths up for success.
Here are the three tips for planning a secure financial future for your children.
Give them early head start!
Start having money talk as early, and as often. This is to familiarize them with money/financial talk: Money is not something scary. Getting them to understand that working is a process of earning money, classifying wants and needs, and the need to plan in order to buy them is an indirect exposure to sense of responsibility, and financial literacy.
You can teach your child early that doing fun things requires money, and this will help them to understand the importance of setting financial goals, and fulfilling them. For instance, allocating allowance for your children will let them learn how to save, what is within their budget, and spend responsibly in order to achieve those goals: short-term goals for Christmas or hobbies/toys; long-term goals for education or holidays; and emergency reserves for rainy days such as broken shoes or gadgets.
Learning these values in a safe environment will also create bonding sessions with your children, and you will be amazed by how much they can recall from this early introduction, and repeated money talks in the future.
Identify best financial products created for this generation
Another tip for parents of this Gen Alpha is to identify the best place to save for their children. Doing so will enable parents to consider financial products created for this generation with financial service providers highlighting goals such as primary education, tertiary education goals or even a future wedding!
Parents have the power to start investing for both short-term goals, and long-term goals. All expenses that must incur within the next few years such as child’s extracurricular activities or school fees are listed under short-term goals. Long-term goals are something like university fees, and living expenses or even abroad education. For short-term goals, extra funds can be invested in liquid assets such as Fixed Deposits since they are moderately less risky. On the other hand, equity investments can be considered for long-term goals as they offer good returns with moderate risks.
Financial products such as chore-setting application with parent’s supervisions empowers Gen Alpha to be actively involved in motivating them to do more chores during school holidays, saving for their short-term and long-term goals, and also to the extent of investing their pocket money into stock markets. With this exposure, they will know more about it, and create sense of confidence or mastery over it: setting children up for good financial success in their adult years.
Get them protected early too!
Well, are those steps enough? Regrettably, those steps are not enough. A good financial plan is deemed incomplete unless the plan has the capacity to protect your children under a good health and life insurance plan. Having children protected at a young age as early as at 0-4 years offers leverage to them as critical illnesses are not detectable at this stage. This is a safety belt ensuring proper coverage in case of unfortunate events in the future.
Medical insurance for your children enables direct access to health services, with the gift of early detection, and early treatment or preventive measures. Protection at a competitive price is possible as early policy activation for the children will lower the premium. Medical plan attached to an investment-linked plan specialized for your children will spearhead savings aimed at your children’s life goals.
On a Final Note
Your children deserve the amazing future you have the power to give them. You can be actively involved in setting their paths to success from the day they are born by getting financially prepared, to also to be included in their education, and teaching them life hacks. Children who grow up around healthy money habits, not prone to be stuck in a vicious debt cycle, are better equipped for emergencies, and charity with the ability to be active in supporting their communities. Engraining good behaviours early on will make them stick better throughout life. As the saying goes, when you know better, you can do better.
So, are you ready for a free consultation with our Life Planner? Kindly click on Contact Us if you would like to know more about children financial literacy entailing financial products/plans to safeguard on best protection for your children.
