Building a financially strong family

It all starts at home. 

Learning. Growing. Adapting. Strengthening.

The core to a financially strong family, no matter the life stage, is great communication about money.

This does not mean everyone must be a pro with money. But, underpinning a strong financial foundation is a willingness to learn tools and techniques to get better with finances.

A few years ago we shared core financial principles that lead to wealth, and it was geared more towards adults. 

Today, we have amended these slightly so that you and your entire family can benefit from these. The best news is it doesn’t matter where you’re coming from - these principles work like a charm!

Don’t spend what you don’t have

Overspending leads to debt, and debt will always hold you back from wealth. But if you can curb that spending and find a place for every single one of your dollars (where they are actually working for you), then you can build a better future. 

This is also why self-made millionaires often talk about how they stick with their budget, even after they become wealthy! 

For smaller children, this principle can be learned through providing them with an allowance, and suggested budget. For example; 10 per cent for savings, 10 per cent for investing, 10 per cent for giving, 70 per cent for spending joyfully.

Make more money every year

The best way to put aside more money every year is to make more of it! Plus, increasing your income (even if it’s only by a little) helps you keep on top of inflation and account for unpredictable circumstances. 

Whether it comes from getting a raise every year or building up a side hustle, make it a goal to make more money each year!

For teens, this principle can be taught through getting a part-time job like babysitting, shelving books at the library, or working at a local restaurant. Earning money is going to help instil the value of money plus teach the importance of working smart for raises and promotions.

Save at least 10 per cent of everything you make

Don’t try to wait it out and hope that you have money left over at the end of your pay to use strategically. Commit to taking 10% of your pay and putting it into savings for the future!

Now, for working teens, this saving percentage should really be much higher because there are no mandatory expenses like rent or a hydro bill. Why not aim for 50 per cent savings. And you can supercharge this by starting to invest the savings in longer-term investments. 

Only use good debt

Not all debt is bad! We want to avoid the debts that don’t help us invest in our future (debts like credit cards, personal loans, payday loans, etc.) But other debt does help us for the future (student loans, mortgages, even business investments.) 

Try to make sure that your debt is contributing to your future. If you’re carrying bad debt, paying it off needs to be a priority! 

If your child will need to take student loans to pay for college or university, they need to know that this is not bad debt... it’s the good kind. So, let’s ensure there’s no stigma around debt for school. The income earning power of an educated youth is 1.5 to 4 times greater than a youth without any post-high-school education.

Marry or partner well

The person you choose to share your life with can make or break your financial goals. If you partner with someone who has uncontrollable spending habits or is so miserly that you feel like you can’t enjoy life, then you’re in for a rough ride. 

You need to make sure that the person you choose is financially aligned with you and your goals! 

As your kids grow, talk to them about healthy relationships; ones that are free from abuse and poor financial habits. Lead by example as best as you can by making money part of a healthy dialogue at home. Show them it’s normal to speak about finances with your partner.

These principles will lead to wealth for you and your entire family. So, get started!