As a parent, it is your job to take care of the wellbeing of your children, however, at one point in their life, this stops being your responsibility. Due to the fact that it’s in their best interest to become independent and set out to take on the world on their own, all you can do is teach them the essential skills and be there for them when they need your assistance. Speaking of which, helping your kids get onto the property ladder and become homeowners on their own, is one of the most vital tasks that you’ll have to deal with. Here are five tips to help you out with this task.
1. The value of money
In order to become an investor of any kind (or even a homeowner), one has to develop a healthy relationship with money. Sure, you don’t want to teach your kids to be money-centric or to allow their finances to always govern their lifestyle choices, however, you need to explain to them the importance of long-term planning and austerity. The school system will not teach them how to do their taxes or the importance of having an emergency fund. They won’t teach them how to responsibly use their first credit card either. All of these responsibilities fall to you.
2. Gift to children
The next way in which you can help them get onto the property ladder is by giving them actual financial aid. As a parent, you can give them a certain amount of money (several thousand dollars) without paying any inheritance tax for it. Keep in mind, however, that this amount applies to all your children. This means that the amount has to be split amongst them. However, there are some perks that you could exploit, as well. For instance, if you haven’t given them their allowance for the previous year, you can add this figure to this year’s allowance, thus giving them twice the money without paying these taxes. This alone can be of great help to them.
3. Solving your own situation
The most important thing you need to bear in mind is the fact that you need to set the right example for your kids, which means that you need to take care of your own residential situation. A lot of parents decide to look for a suitable community residence such as retirement villages in Sydney, not just to solve the issues regarding their lodging but also to live in a more retiree-friendly environment. Access to various healthcare and wellness services and options, as well as a company of peers, helps you choose the best option lifestyle-wise. Moreover, this is often an option that you’re reviewing years in advance, rather than making an impulse decision.
4. Save up enough for retirement
Previously, we’ve talked about solving your own situation and helping out your kids. Now, your financial goals in retirement need to be established years, even decades before you retire. So, how much money do you need for retirement? What are your plans? Do you just want to live out the rest of your days in peace? Do you plan to travel the world or do you intend to use your money to help out your children financially? Depending on this, you’ll need to have a certain amount in your retirement fund. Consulting a financial advisor and doing some financial projections of your own may be more than necessary here. The sooner you start, the better the result will be.
5. Don’t help them too much
While this may sound like an excuse to save your own effort and money, the truth is that you are doing them a disservice by helping them too much. First of all, regardless of their age, if you step in every time they encounter a road bump, you’re giving them one less reason to become self-reliant. Usually, we’re developing our problem-solving skills in the moments of need, however, if we can expect an external entity (mom and dad) to solve the issue every time we encounter a problem, this could backfire.
The very last thing you need to understand is the fact that all of this takes years, even decades. This is why you shouldn’t wait for your retirement to start making financial plans and you shouldn’t wait for your kids to start looking for a property in order to start giving them tips. All of this needs to be done a lot sooner.