Financial Intelligence

Raising Financially Secure Young Adults

If you live in an area where unemployment is common even among academically successful young adults, this article is for you. Gone are the days when gaining a degree at a reputable college or university guarantees a coveted job that leads to financial security. Like it or not, we must raise our children for a world of uncertainties.

What can parents do to coach children to be financially secure in a world that is increasingly full of unemployment? Preparing children to be financially secure in a world with potential unemployment challenges requires a combination of practical skills, financial literacy, and a mindset that fosters adaptability.

Here are some tips for parents:

Teach Financial Literacy

Introduce basic financial concepts early on, such as saving, budgeting, and the importance of understanding interest. Explain how credit works and the potential consequences of debt.

Needs vs. Wants: Explain the difference between things they need (essential for survival) and things they want (nice to have but not necessary).

Encourage Saving

Help children set up savings accounts and teach them the habit of saving a portion of any money they receive. Discuss short-term and long-term savings goals.

Example: Choosing to buy a good second-hand laptop (short-term goal) instead of a new one, to save more for down-payment for a house (long-term goal).

Develop Budgeting Skills

Show your children how you budget the family income. Some parents opt to teach budgeting by giving children a small regular allowance. Help them allocate money for different purposes, including saving and spending. Be sure to factor in zakat (economic contribution among Muslims) and sadaqah (charity) as a long-term investment.

Promote Entrepreneurial Thinking

It could be in the form of starting a small business, like selling handmade crafts online. Becoming an entrepreneur demands discipline and the courage to try new things. Foster an entrepreneurial spirit by encouraging creativity and problem-solving. Such a mindset can empower children to identify opportunities, take initiative and explore innovative solutions.

Educate about Investments

As children get older, introduce the concept of investments. Discuss stocks, bonds, and real estate, and explain the potential risks and rewards.

Provide Work Experience

Encourage part-time jobs or internships during high school or college to give them a taste of the working world and build a work ethic. Volunteering is an excellent choice.

Focus on Education

Emphasize the importance of education and continuous learning. A well-rounded education can make individuals more adaptable and marketable.

Cultivate Soft Skills

Develop interpersonal and communication skills. The ability to work well with others and communicate effectively is valuable in any profession.

Instill a Strong Work Ethic

Teach the value of hard work and perseverance. This mindset can help them overcome challenges and setbacks.

Encourage Critical Thinking

Foster problem-solving and critical thinking skills. The ability to adapt to new situations and think creatively is crucial in a rapidly changing job market.

Lead by Example

Demonstrate responsible financial behaviour. Children often learn by observing their parents, so modelling good financial habits are essential.

Explore Different Career Paths

Help your children explore various career paths which will lead to different potential earnings. Encourage them to pursue their interests and passions while being aware of the market demand for certain skills.

More than ever, young adults must believe in themselves, be adaptable, able to make good decisions, and remain hopeful and optimistic come what may. Every responsible parent dreams of raising financially secure children. Financial security is about earning enough money and managing it wisely. By cultivating practical skills with a positive and adaptable mindset, parents can better prepare their children for a financially secure future, even in the face of potential unemployment challenges. Planning for retirement is better done sooner than later. Children must learn how to make their money work for them, such that they become financially free as soon and as early as possible.

Featured photo courtesy of Naomi Shi

About Jamilah Samian

Jamilah has written 538 articles.

Jamilah Samian is an author and speaker.

Discuss your thoughts below!

comments.

[banner group='ads-300x300']
To Top