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in Budgeting Tips | Money Talk · September 24, 2020

10 Financial Tips To Teach Your Kids

Teenagers are exposed to so many new learning opportunities that it’s difficult to imagine that one of the most critical aspects of their adult lives (personal finance) is not sufficiently addressed for the majority of children until they graduate from high school.

I find myself, more than three decades after my adolescent years, determining what details I can share with my teenagers. It’s difficult to hold your children’s attention long enough for them to clean their rooms, let alone learn about finances, in today’s high-tech, high-text, supercharged video game period.

After much trial and error, I discovered ten financial tips to teach children and a few innovative ways to capture their attention along the way.

  1. Banking 101 – As soon as your child is born, open a savings account for him or her and begin preparing a lesson plan for teaching money management. Open a checking account for them during their adolescent years, but do not allow them complete control of the account. Begin by instructing students on the fundamentals of depositing and withdrawing money using checks and deposit slips. Teach them how to reconcile the account, taking into account that the balance shown on the online system can not correspond to their actual balance. When necessary, incorporate a debit card, but exercise extreme caution with this portion of the lesson. It can be extremely expensive if they get carried away with unauthorised ATM / debit transactions.
  2. Discuss Money Matters – It was once considered taboo to discuss personal finances with your children. It is important that you explore the fundamentals and more in today’s financial environment. Making your children comfortable with the subject begins with your own familiarity with money matters. Begin with fundamental discussions about investing, budgeting, and banking. Utilize real-world examples, such as bank fees that you observe on your bank statement. Share your strategy for reducing or eliminating such fees in the future. You’ll be shocked by how often children participate until they’re included in what was previously considered a “grown-ups-only” debate.
  3. Basic Budgeting – Begin teaching children basic budgeting skills early and gradually expand the lessons as they mature to the point that they can create their own budget. Simple money management entails keeping track of your expenses and determining where your funds are heading. This is one of the most important lessons you will teach your children. This is a straightforward process that, once established, will prove to be extremely beneficial to them over time. Make certain they understand the importance of “paying themselves first.”
  4. Needs vs. Wants – This can be difficult because teens believe that anything they want is a necessity. Assist them in identifying the fundamentals of food, shelter, and clothing (not the latest fashion). Although they may be able to obtain an item they want but do not need, ensure they recognise that it must be factored into their budget in order for them to make the purchase.
  5. Credit Card 101 – Teach your children to use credit responsibly. Assist them in comprehending how purchasing something they want but do not need on credit now can result in the accumulation of excessive debt, creating problems later. Utilize your credit card statement as a teaching method to demonstrate the difference between easy and compound interest. Demonstrate to your teens that approximately 15% of each minimum payment goes toward the principal balance, while the remaining 85% goes toward interest. They need to remember that if they make the minimum monthly payment on a $3000 balance, it will take nearly 40 years to pay off. OMGOSH!
  6. Credit Scores – The majority of people, mostly teens, have no idea what credit scores are or how to build and maintain good credit. Credit scores are a reflection of your ability to control your credit effectively. The scores are comparable to the grades assigned to students in school. Teach your children how to build and maintain credit relationships, mainly with banks. Encourage them to maintain an A credit rating by paying their bills on time and avoiding excessive credit.
  7. Invest Immediately – Investing is a skill that can be taught at an early age. Teach your teens that individuals own a variety of businesses, including Walmart, Xerox, and local cable stations. They can also acquire stock in these businesses. As a homework assignment, delegate them to conduct research on various companies or sectors of interest. Encourage them to research various investment options such as mutual funds, stocks, and bonds that can allow them to acquire ownership in some of their preferred industries or companies. Make monthly deposits that should pay off handsomely by the time they hit the age of 30.
  8. Safeguarding and Protecting Valuables – Teach your youth that their identity is just as important as the things or cash that they are attempting to safeguard and secure. They will now be able to submit applications or fill out forms that include their social security number. Emphasize the value of not sharing their social security number, account number, or other form of personal identification with others. Occasionally, children believe that sharing this knowledge with their best friend is appropriate. Justify your position by stating that this is not negotiable. They are aware that identity fraud is prevalent in today’s culture and are averse to being a victim.
  9. Keep It Exciting – To keep the lessons interesting, consider using games like Monopoly, which teaches students about the benefits of land ownership and demonstrates how their assets will begin to function for them. While you’re at it, show your teens how to change money without using a cash register or calculator.

Allowance; Pay Your Own Way – Have you ever noticed how quickly children can waste your money? Charge your children with the burden of paying for their own expenses and watch your spending decrease. Enable them to receive an allowance and hold them accountable for a monthly expense such as their mobile phone or weekly lunch money. Assure that they understand their role by enforcing the budgeting process. You’ll be amazed at how their spending habits shift once the money leaves their wallet.

We all want the best for our children as adults. As parents, one of our primary responsibilities is to ensure that they are prepared for life. I intend to spend as much time as possible with my teenagers. The exercises above allow me to spend some of that quality time imparting a life lesson.

This post may contain affiliate links. I may get commissions for purchases made through links in this blog.

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New Blog Post 🚨 In this week’s blog post I am New Blog Post 🚨 In this week’s blog post I am going over why we bought a short-term rental, our experience so far. Plus what we did prior, during and after purchasing our first short-term rental in March 2022, a Cabin in Blue Ridge, GA.

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I can’t stress this enough. Some investors are l I can’t stress this enough. Some investors are looking to make money from day one, but that’s not always the case. It wasn’t for us and I’ve talked to a lot of rookie investors who have told me “Thank God I have my personal finance situation together.” 

This is just my opinion. Do you agree? Let me know in the comments!

Want to join a free community of like-minded individuals? Join our REI Coffee Chat Community where we talk real estate investing, personal finance and financial freedom, and much more! Link in bio @beyondjustnumbers

Want to learn more about investing in real estate? Read my blog www.beyondjustnumbers.com

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I used to think that investing in real estate was I used to think that investing in real estate was for the rich. I became in love with real estate while working for a real estate investment company that owned hundreds of units. This was back in 2011 and I was 20 years old at the time. I had less than 5 years permanently living the US, so I had no idea about anything. I grew up in Colombia and the only talk of money we ever had was the lack of it. 

The investors I worked for were a wealthy family, so naturally, I thought… Real Estate requires wealth. I don’t have wealth. Therefore, I cannot invest. 

I figured… well shit, I need become wealthy so I can invest in real estate. Eventually, after educating myself I realized how wrong I had it. You can build wealth BY INVESTING in real estate.

Took me a couple of years to figure it all out. Hence, why I didn’t start investing until 2019. I wish I had figured out earlier, but it is what it is. In just 3 years of investing in real estate, I was able to accumulate more wealth than I ever thought possible. 

Just to give you an idea…Did you know you could invest in real estate with as little at 3.5% of the purchase price? For a $150,000, that’s only $5,750. Buy a duplex that needs a little bit of work, fix it up, rent one side and live in the other. This will reduce your monthly expenses significantly, save the money and do it all over again.*

Of course it’s not that simple, but it’s also not that difficult. There are some particular steps and considerations which is  why I recommend doing further reading on the subject. 

Book Recommendation:
✅“The House Hacking Strategy” by Craig Curelop and ✅“Investing in Real Estate with No (and Low) Money Down” by Brandon Turner. 

#realestate #realestateinvesting
🚨 New Blog Post! Continuing the “Getting Star 🚨 New Blog Post! Continuing the “Getting Started in Real Estate Series” 

You’ve found a property either on your own or through a realtor, you’ve run your numbers, you’ve got a lender and now you are ready to make an offer. What’s next?

In this post I want to discuss a few items:

✅Key components of a real estate contract
✅How do you make a compelling offer to ensure you get the property you want
✅The main contract contingencies and how they work
✅Communicating with your realtor

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We see a lot of advice around hiring a real estate We see a lot of advice around hiring a real estate friendly CPA. However, when you look up  CPAs that specialize in real estate, they can be pricey.  However, that doesn’t mean that other CPAs or tax professionals aren’t good. They might not be particularly aware of certain items, but they can research and collaborate with theirs peers. Perhaps it may require you to do a little of work to compensate. Things you can do:
✅ listen to The Real Estate CPA podcast or join the Facebook group
✅follow social media accounts of the pricey Real Estate CPA and take notes of what they are saying
✅attend free educational events 
✅read BiggerPocket book on Real Estate taxes 
✅if you know anyone working with a really good Real Estate CPA firm, ask them what they are doing

Then use that to go your CPA or tax professional and be like “Hey, is this something we can do for me?” They’ll probably say, “Let me look into it”. 

If they are good, they are going to research it and/or ask their CPA peer group. (CPAs and tax preparers also have Facebook groups where they collaborate with each other).

Here is a piece of advice, if they tell you “No, we can’t use this loophole or no, you don’t qualify to use this strategy” —> Ask WHY and “How can I qualify in the future?.” This way you confirm they did their homework and aren’t just being lazy. Don’t just take no for an answer. You can then get a second opinion by asking a question in a forum or to your peers.

So don’t panic if you don’t have a real estate CPA or tax professional. 

Next video I’ll be answering the question… “Can I skip the tax professional altogether and do my own taxes?”

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