The best way to teach your kids the value of money
One of the most important actions you will need to take when you win the lottery is to plan for yours kids’ future. Each child is an extension of you and as a parent your job is to make sure that they have the resources and opportunity to achieve life goals such as education and effective employment. This is not throwing some of your winnings at your kids and letting them go willynilly with it. This is about you as a parent doing what it takes to secure your child’s future.
The Value of Money
The first thing you should to is teach your kids the value of money. Explain to them what money is, why it is important for a person to manage money correctly, and teach them how to take of money. Give them ten dollars and see if they still have it at the end of the week. If they still do, then they are on their way to being effective money managers and budgeters. Get them to create a budget board and ask them to budget their ten dollars for the week. \notice what they see as important things to buy. Guide them with suggestions and advice, but let them make their own decisions. Eventually, they will understand the value of money.
Next, set aside an appropriate amount for each child to got to college or university. Place this into an interest bearing account in your name. This way, the money will be protected from prying eyes and sticky fingers of your young ones, and will slowly build up increased value over time. When it is time to pay for college or university, you can withdrawal the required funds and pay for education.
Trust Funds and Savings
If you want, you can set a trust fund for your kids. A trust fund is used to establish an accessible source of money or income for your child when they reach 18 or according to your rules. Each child’s trust fund contains a certain value of money that can either be released to your child upon their 18th birthday, or is only accessible according to rules and terms you have placed on the trust. For instance, if you want them to manage their money effectively, then you can limit the amount of money they can access per day, week, month, or year. Limiting access means they can’t blow it all at once, and it will take long time to deplete the fund.
When setting up the trust fund(s), keep this important things in mind. Pick the right trustee for the fund. The trustee, usually someone at the accounting firm you use for your financial assets, has to be, well, trustworthy, honest, and have your interests, and the interests of your child in mind. Make sure you place the limits on the amount they can access and time frames for doing so, to control their spending. Meet with and review with the trustee once a year to see if the plan is being administered by the trustee properly, and if your child is accessing the funds according to your wishes. If you want to use the trust fund as a way to store college or university funds, ensure you have the rules for withdrawal and use, worded in the funds policy.
Another thing you can do is buy things to help them improve their interests and educational directions. For instance, if your child has an interest in science, you can get them some science kits in the areas they are most intrigued by, or get them outside tutoring in science. Helping your child get educated in an area they have a particular heavy interest in may help to propel to go to college or university to pursue a career in that or a similar, field.
Winning the jackpot in the lottery can be life event not only for you, but for your kids as well, if you set aside money for them for education and/or living expenses. Taking care of your kids’ futures is just as important as taking case of yourself.