Although there are many benefits to acquiring a financial education as early on in our human growth and development as possible, as much as 20% or more of Americans never discuss money management with their children. Psychologists and financial experts believe that instilling in children ethical work principles, self-reliance, and financial literacy could lead to a happier life. You may find that your recent college graduate has an outstanding debt but very few debt relief options. This is because they haven’t been taught how to become financially independent. If this is the case and your child is looking for debt relief options, read on, finding debt relief may be easier than you think.
Allowances and chores are popular parental strategies, but they are not enough. To help your child deal with debt relief and find the best options for financial success, instead of handing out a spending amount, children can participate in the decision-making process of allowance and become aware of the reasons why it is beneficial for him/her to know how to manage their spending money. After all, money doesn’t grow on trees. Debt relief options are at your child’s fingertips. It’s how they manage their life that counts.
Budgeting and saving are the most crucial factors to tackle during conversations with your child. Discussing and setting short and long-term goals lead to achieving the necessary skills to find debt relief options when education and ca loans are weighing heavily on their finances. First and foremost, it pays to get into the habit of saving. Curbing instant gratification purchases such as ice cream, fast food, or the new shoe style, will lead to a debt-free life when you’ve applied the best debt relief option of all: saving for a rainy day.
For many young adults, the cost of living can be extremely difficult to meet. Student loan debt, for example, is one of the most corrosive elements preventing young adults from obtaining credit and achieving financial independence. Parents are instrumental in helping children reach their financial potential by promoting and showing them the money management skills necessary for success. In fact, debt relief options are simple and straightforward. But they must also be consistently applied to daily living habits.
Many college grads find themselves having to move back home, not because they are looking for a smooth ride, but because the cost of living is higher than their ability to make ends meet. This is true today in most metropolitan areas and beyond. You may need to step in as a parent and your child’s best friend. Intervening to help your child find debt relief options and become financially independent is something both of he/she will one day be grateful for.
The following guidelines are proven to develop sound financial judgment in young adults to help them cope and prevent economic hazards. Don’t wait until you have no debt relief options available. Prevention is the key to financial wellness.
- Define expectations
Whether your child is living back home with you or has moved out on their own, most parents would like to help their children meet the responsibilities of adult life on substantial grounds. Communication is the key to defining expectations you have of them, especially if they are still living at home, as well as those expectations society places on young adults when they are in the real world surviving on their own.
It’s not that parents don’t want their children to have a nest to return to and be comfortable, but that may hinder their child’s ability to develop the necessary skills to fly way. When your child is in debt, finding a debt relief option that works for them is where parenting comes in handy at any age.
Be clear and consistent about the boundaries and rules your grown child must abide by at home if he/she is living with you; this will guarantee a safe transition to their own nest. Set realistic goals, decide on a step by step course of action. Follow through. Reconvene and discuss what is working and what is not working on a regular basis. Always keep the communication door open.
- Budget, budget, budget
No matter what the circumstances are, even if your child doesn’t have a job yet, a budget can be created so that when he/she does have income, it will be easier to follow through on the plan. The secret to finding debt relief options is in how well they can stick to a budget.
Becoming aware of the daily cost of living is an eye-opener most young adults don’t develop until later on in life when they have had to figure it out on their own when they have already acquired debt. Why wait when they can be ready sooner. Frustration is easy to set in when in debt and it may seem like there are no right or quick debt relief options. But planning for success is the way out of the struggle.
If your child is gainfully employed but the goal is to gain a higher financial position before taking the leap, budgeting and sticking to the budget is the only guarantee to a financially independent existence. To consistently follow the daily budget limits, checking and reviewing statements and account activities is the best medicine.
- Get rid of the unnecessary fluff
There are two little words used frequently that have strong ties to financial success. Discuss Wants vs. Needs with your child and find pleasure in being able to control frivolous desires that lead you down the wrong fiscal path. Once the fluff has been eliminated, financial gains will follow, and instant gratification will turn into long-term satisfaction. Allow and expect your child to cover their phone, gas, and insurance payments. This will make them responsible and reliable. Every debt is manageable, but it takes determination and perseverance: the best debt relief option for everyone.
- Motivation is the precursor of change
If everyone saved a percentage of their disposable income instead of spending on things they want versus their future, there would not be any need to find debt relief options. Instead, we would be able to have the big things we desire for our future lives that much faster. Saving can make a huge difference in being financially independent. “To motivate your child and create the beneficial habit of saving, you can, for example, offer to match their first $500 saved,” says financial advisor and mom, Stephanie Bussell, of Omaha, NE. When her daughter came back home after college, she was able to save enough money to move into her own one-bedroom place in less than a year after she got hired by an IT company. “We used to play games like these when she was in grade school,” recalls Mrs. Bussell. “She’d get an allowance and was asked to save 20%. If she did, I would match that with another 20% and this made a huge difference in her savings habits.”
“When she found that her graduate student loan was a little overwhelming, she moved back home and was able to make two years worth of payments on the loan with a bit of extra income from a side job. Making this sacrifice really gave her the confidence she needed and was a great debt relief option,” elaborated Mrs. Bussell.
- Rent is due
It’s OK to charge your child rent. Even a small insignificant amount is helpful. What you want is to build the responsibility and reliability of having to meet a monthly due. You may want to give it all back to them when they decide it’s time to settle down on their own. But don’t give it away. Building good financial habits is key to success in life and becoming debt free.
- Debt managing
Everyone has to get into debt at one point or another in life. Whether you are buying a vehicle or acquiring a mortgage on a home, sound debt management is a skill that we all need to learn. The first debt a child acquires could be a small amount they can pay off quickly, but making payments on time and knowing the terms, benefits, and responsibilities of having a loan are priceless. Student loans are an excellent example of how not knowing how to manage debt can pull young adults under significant financial stress. It may be difficult to find the right debt relief option if your child has unpaid education loans and doesn’t make any payments on the interest of the loan. The unpaid interest will roll over into the principal, and pretty soon the loan principal will double, and there will be no end to it.
Getting the details in print is not enough sometimes. Making calls and applying even small but consecutive payments to the interest of a loan during hard times is paramount to becoming financially independent.
- Vision and career planning
Degrees take effort, time, and resources to achieve. But many young adults lack vision when they graduate from college. Knowing what their career path is and how to get and stay on can be the most challenging postgraduate activity for young adults. They focused on getting the degree, but when they finally walk, then what? Many become discouraged when they can’t find the right job. Planning for and researching career paths is the first step. In some cases, relocation is necessary since some industries are centralized in certain geographic areas. The cost of relocation must be computed into the plans. If one job is only covering the essentials, think about a side or part-time money making venture that will help meet the goals set for a certain number of months. “Taking the time to visualize and plan a career path while at the same time paying at least the interest on outstanding debts can be the best course of action for a new grad,” says Heather Placencia of Jonesboro, WI, financial planner and educator.
Every child’s circumstance is different and complex. Smart money management, however, is simple: spend less than you earn and invest in your future by saving between 10 to 20 percent of your income. No matter how long it takes, the first step to finding debt relief options begins with setting financial goals with your child before incurring in debt.
