If you’ve been hanging around the blog for the Law Office of Bryan Fagan, PLLC, the past few days, then you know that we’ve been discussing the topic of finances. Specifically, how your divorce can impact your finances; yesterday, we introduced how to talk to your children about finances and different issues that can present to you and your family. I want to continue to discuss that today, but at the outset of our blog post, I wanted to go over some steps you can take towards being a complete person regarding your finances.
As an adult, you have likely learned some skills that will benefit you in your finances. Some of us have learned more than others and vice versa. In general, though, the following are some usual tips to either begin or continue your path towards success regarding your finances.
So too do we learn how to handle money as a child. The lessons are similar to ones that we know as an adult but are easier to digest and more appropriate based on your child’s specific age.
How to save money. You can do four things with money: spend it, give it away, invest it, and save it. Saving money is an essential thing you can do when you earn cash. Rather than putting it to use in some other regard, you leave it with you and keep it safe. It’s not accruing interest or going towards something that you enjoy, but it is not being lost through spending either.
Keep track of your money. As an attorney, I always get excited when I see that a new client is good at organization. This means that the client is intentional about their habits and does things with a purpose. You can teach your child how to keep track of their money by showing them the relative importance of money and the ways that money can improve their lives and the lives of those around them.
They were being paid a fair sum for work completed. This is the argument that we hear discussed often in the media- how can professional athletes be paid millions of dollars for playing a child’s game when teachers have to scrape by (in comparison) with only moderate incomes? How is this fair? You would be well served to help your child understand issues like this while they are young. In so doing, you will be showing your child how to be compensated fairly for their contributions- economic and otherwise.
We were spending your money intentionally. So often, money burns a hole in our pockets and is gone before we know it. This happens because we consider spending money on a product that we don’t need, and the next thing we know, the money is gone, and all we have to show for it is a plastic gizmo that we will forget about in a couple of weeks. Teach your child not to spend their money on something that catches their eye simply because they have the money to do so. Act intentionally when spending money and teach your child to do the same.
You were talking honestly about money. We have been discussing this topic for the better part of two days on this blog. Based on your own particular beliefs on the subject and your child’s age, you should consider speaking with them about personal finances so that it is not a foreign subject to them. You can go as far as you would like when discussing your specific situation, or you can merely impart words of wisdom and present teachable moments.
Budget, budget, budget. In my opinion, all of the advice that we have given to you this week about personal finances will be wasted unless you can get yourself on a budget. You must know where your money is going at the beginning of each month. A budget helps you do that. A budget will also permit you to spend money on specific items and in certain ways. You will never have to wonder whether you have the money to do something when you are on a budget. If you follow every other piece of advice we have given over the past week but do not get yourself on a budget, all of your hard work will not have the desired effect.
Investing. Everyone and their cousin have a theory on investing. Sometimes you don’t even have to ask them for that opinion- they’ll be happy to share it with you unsolicited. With that said, there are plenty of fair and honest resources available in print for you to learn from so that you can learn how to invest your money to see the best returns. Interview financial planners if you want assistance to have a support system when it comes to investing. Otherwise, learn as much as you can, ask questions when able, and do something. Do not get paralyzed by your options. Let the money that you’ve worked so hard for work for you.
You were minimizing/maximizing your relationship with credit. Credit can both be a helper to your finances and a hurter. It can help you buy a home to raise a family in. It can help you build a business. It can also hurt you with substantial interest payments. If you overleverage yourself with debt, you can face a rude awakening when your assets devalue, and the debt remains. The fact is that debt is not a tool to be used with any frequency, in my opinion. Teach your child that they should pay cash as frequently as possible. If debt must be used, it is wise to pay that debt off as quickly as possible to allow you to use your money for more worthwhile and profitable pursuits.
You were using money as a springboard to improve your life and the lives of those around you. Money is not a means to an end. It is a means to allow people to let their true colors shine through. If you were an angry person before you got money, you would likely end up being an angry person after you make a dollar or two. If you were a grateful person before you began to make money, you would likely stay that way after building wealth. My point is that you can teach your child to use their money in ways that are productive for themselves, their family, and society as a whole. Model this behavior on a day-to-day basis in your actions, and you will be off to a good start in this regard.
Be upfront with your kids when discussing divorce and money.
Do not wait until the last possible moment before your divorce is underway to begin talking about these subjects. Presenting a united front with your spouse on this subject, in addition to your divorce, is a great way to show that your kids are still the center of each of your lives. Reassurance that your child did not start the divorce and that both parents love your child is pretty much all you need to do. You are showing that you trust your kids and want them to trust you by doing so.
Questions about divorce and finances? Contact the Law Office of Bryan Fagan, PLLC
To learn more about this subject or any other in the field of family law, please do not hesitate to contact the Law Office of Bryan Fagan, PLLC. We offer free consultations with licensed family law attorneys six days a week. It would be an honor to sit down with you and to discuss how we as a law firm may be able to assist you and your family in this difficult time.