Question – How do I teach my kids finance?
This is not an uncommon question. Many parents have struggled for years to understand this answer. There is one principle that you can teach your kids. It is called GSS principle. Teach them how to give, how to save, and how to spend. If you use this, you will give them the greatest financial principle for life.
Here are some more suggestions:
· Give them money for chores around the house, allowances or reward them for excellent grades.
· Encourage them to save the money that you are given them in a bank account. Many parents wait too late to open a checking/savings account for their children. This will give them a sense of responsibility.
· Use the GSS principle with them. Allow them to give some of it away by tithing to their church or by donating to the less needy. Teach them the value of giving to others less fortunate. Their mindset will change once you do.
· Give them the option to either save or spend their money. By allowing them to save or spend their money, they will choose what to do with it. Enforce spending within their means.
· Teach them the priorities of having a goal for their money.
· Play games with them such as Monopoly. Although fun, these games will allow them to understand about money at a quicker pace than their counter parts.
Question – What are the best investment products?
I don’t endorse products. Understand that stocks, mutual funds, bonds will not give you everything. You must have a well-rounded vision as found in Habakkuk 2:3 For the vision is yet for an appointed time; But at the end it will speak, and it will not lie. Though it tarries, wait for it; Because it will surely come, It will not tarry.
Here are my suggestions:
· Invest by putting money away for yourself whether savings, emergency funds, or etc.
· Utilize your company 401K or 403B as sometimes most companies will match your contribution.
· Use insurance as a way to fund your financial vision. See an insurance specialist for more details.
· Look for tax advantage opportunities such as a house if you are renting. In some areas it is a buyer’s market.
· As always, see you trusted financial advisor; pick one who has similar goals and beliefs as you.
Question – I owe $40,000 from my debts – where do I start?
Debt can be scary thing if you allow it to conquer you. The first thing that you have to do is to change your mind about your finances. Don’t allow money to master you. You master it. Understand that your behavior now has to change for evermore. I know this is harsh but most people get back right into debt after eliminating it. Here are some of my suggested steps (some you have heard off and some you have not heard):
1. Pray and Listen – Whether you are a believer or not, you need the help of God or higher power. Understand that you have access.
2. Compile all debts from smallest to the largest
3. Payoff the smallest balance while paying minimum payments on the others. You can consider calling the companies to see if you can settle for debt less than owed. They don’t have to settle with you. If unsuccessful, plan to pay the debt off.
4. After paying off the smaller debt, use that money and add it to the other bill to pay it off quicker. Continue to payoff all debt until you get to the last bill. This is called recycling.
5. Be patient – all debt will not be instantly payed off.
6. Consider selling things that you don’t need and consider valuable and use that money to pay off debt. Answered prayers are a wonderful thing.
7. Occasionally pay off debt for others. Do unto others, as they will have to do unto you. It works. You never know when someone will pay your bill off or your creditor will say no more payments. We will settle for debt less than owed. It happed to me.
Have a good day
P.S. Encourage your friends and family by sharing this column and invite others to ask questions about their money – it’s free! Send questions to firstname.lastname@example.org or visit the contact page at www.cedricdukes.com. Cedric Dukes, speaker and columnist, is the author of Hostile Takeover – Manifesting God’s Plan and Purpose for Your Finances.