Family of 4

Family First

How to Make Sure Your Kids Have It Way Better Than You Did

by Kaycee Cuaira

George Orwell wrote, “Each generation imagines itself to be more intelligent than the one that went before it, and wiser than the one that comes after it.” True or not, many people also expect to be better off than their parents were. And most people want their children to have a better life than they did—it’s just natural to try to help your children achieve the things you wished you had.

But have you ever actually tried to sit down and plan how to help your kids have it better than you? What you consider “better” is partly a matter of personal values, but here are some suggestions on how to improve on the past.

Finances

There are a number of things you can do to help your kids with their finances, but one of the most important things is making sure they are well educated in managing their money.

Part of their education will be learning from your own money habits—are you saving? Are you investing? Do you buy on impulse or do you plan your purchases? You can start to talk your kids through money concepts at a young age, explaining credit vs. debit cards, where the money you spend comes from, how you pay bills, etc. You can also involve them in the decision-making process for buying something, like a big purchase that the family agrees to save for, and explain to them how you decide what to buy and what not to buy.

Letting them earn an allowance that they can save or spend allows them to build on their own money management skills. It’s also a great way to fend off the feelings of entitlement that accompany your child asking for something that they want. Instead of you buying them what they ask for, let them save their money and decide what they will buy with it. That way they learn at a young age to prioritize purchases and connect spending with income.

Retirement

For an experience far beyond education, you can help your teenager actually build wealth. By putting their savings from summer jobs during their teenage years in a Roth IRA (a custodial account, if they are under 18), you can give your child a head start on saving for retirement.

Suppose you invest a total of $7,500 from your teen’s summer jobs from the time they are 13 to 18 years old in a Roth IRA. With a 7% growth rate, even with no further additions to the account, they could have an IRA account worth $180,343 when they are 65 years old.

If you or your child continues to contribute to the IRA, especially while young, their retirement savings from that account could amount to much more than that.

Legal Protections

There are a number of things you can do to make sure your kids are provided for in case you are no longer around to help them. The first is making sure that you choose a legal guardian for your children in case something happens to you (and your spouse, if you are married). If you know you are going to have children, you can add a guardianship provision to your will even before your child is born.

You can also set up a trust for your life insurance policy, so if you happen to die while you still have minor children, they can access the life insurance benefit according to your wishes and not necessarily all at once. A trust can be beneficial for your child in a number of other circumstances as well, in making sure your child is provided for over the long-term after you pass away.

The Global Classroom 

If you want to broaden your child’s education and expand their mind in a non-traditional way, consider investing more in experiences than in things. Spending time in another country can be especially eye opening for both you and your child.

Different families can approach this in the way that suits their lifestyle the best. Most states allow homeschooling, so if your job is one that allows you to work remotely, you have a variety of options, especially if your child is motivated enough to do self study.

One family I know rented an RV and toured around the country for a year when their youngest child was in high school. Another family chooses to live in a modest apartment and take vacations all over the world rather than spending more on housing expenses. A third family sold most of their things and is spending a year living in 6 different countries, 2 months for each country, while continuing to work and study remotely.

You may also be able to take an assignment with your company in another country, go on sabbatical, or send your teenager on foreign exchange or to a summer program in another country.

Experiencing life in other countries and cultures is an experience that simply cannot be learned in a classroom or a book, and if you have the courage to make it happen, do it. Your child’s horizons will be broadened and enriched for years to come.

Higher Education

Depending on when you grew up, where you went to school, and your family’s situation, if you graduated from college you may have done so with relatively little debt. But since the cost of higher education has been increasing far faster than wages, graduating without debt may not be an easy feat for your kids.

Graduating from college without debt (or with very little debt) provides a huge leg up for your child. It allows them to put money towards a home or savings, and gives them more freedom in choosing what job to take.

You can help make your child’s higher education experience a blessing rather than a burden by saving for their college expenses, encouraging them to choose a major and school with a high return on investment, and finding other ways of making sure college is mostly paid for.

If you get started early, when your child is young, a 529 plan can help you save for your child’s college expenses. They may also be able to attend college for free, have the military pay for it, or subsidize the costs of college by working while in college and pursuing scholarships and grants.

A word of warning from the experts: if you cannot save for both your own retirement and for you child’s college costs, prioritize your own retirement. Just like we are told in flight safety instructions, you need to put on your own oxygen mask before helping others. Your child can borrow for college, but you cannot borrow for your retirement.

Independence

With kids growing up in the digital generation, make sure you carve out time to teach your kids important life skills, like cleaning up after themselves, cooking, repairing things, growing things, etc. Give them chores and responsibilities to manage in your house so that being an adult is not a huge shock—and also so that they move out of the house once they are adults.

You should also encourage them to be entrepreneurs, and support or direct them in their efforts to make money. Help them learn that even when you can’t find a job, you can create one.

And if you really want them to be happy, also teach them both empathy and stoicism. This will have an impact on all the other good things you want for your child—health, wealth, and overcoming adversity.