Investor Minute
Your Financial Well-Being Has Multiple Benefits for Your Kids
Getting your finances under control can bring benefits to many areas of your life.
First of all, being on a budget, having funds set aside for unexpected expenses, and putting away money for retirement means that you can be in a much better position to face life’s financial challenges (which are sure to come).
Second, knowing your finances are on an even keel brings tremendous peace of mind. You can open the mail without anxiety because you know all your bills are adequately covered.
Third, sticking to a budget requires a little discipline in your spending, but rewards you with immense satisfaction knowing that you control your money and not the other way around.
And now research has identified a fourth benefit to financial health: Your kids’ well-being. When kids are aware that their family is having financial trouble (and older kids can tell), they end up having more problems in other areas of their life.
Recently, psychology professor Jamie Hanson conducted a nine-month study of teenagers in the Pittsburgh area to assess the effects of economic uncertainty in their lives. Unlike most studies in this area, Hanson and his team did not rely on parental reporting, but instead spoke directly with the teens.
The study found that, “Teens’ views about their families’ economic challenges are connected to their mental health and behavior.” For example, many of the respondents reported that when their families couldn’t afford school supplies or lacked money for other necessities, they were more likely to feel depressed and get in trouble at school.
And the impact can be long-term. For most of us, our relationship with money is defined in our formative years. This is when many of our unquestioned assumptions about our finances are formed. When you show your children the right way to manage money, it helps give them good preparation for when they will be responsible for their own household.
Sadly, many of us had to unlearn the wrong things we learned about money growing up.
Financial instability does not automatically go away when you make more money. According to a survey by Bankrate, among those earning $80,000-$100,000 per year, thirty six percent reported living paycheck to paycheck. Conversely, it’s also possible to earn less than average and still be on good financial footing.
If you feel like you could use help getting your finances back on track, having an overall plan and sticking to it will not only give you a more secure future tomorrow, but also greater peace of mind today. I can help you plan. Make an appointment for a free call with me by clicking this link.