Question

 A 45 year old client asks; "I can't help but think that the Pandemic,

like the Great Depression, will affect everyone's approach to their finances. I'm especially concerned about my Millennial children's financial future. How can I help them build a solid foundation?" Describe 3 strategies and how you would convince a client to utilize them. 

Answer & Explanation
Verified Solved by verified expert

Maximizing on savings.

Teaching the children on healthy financial habits.

Leading by example.

 

Step-by-step explanation

Maximizing on savings. The savings should be in liquidity because they do not fluctuate as compared to other investment options. Incase of a future pandemic or financial crisis it is easier to access the money for essential services. In addition, savings account offer interest on the account. The money will continue to grow as years pass and its value ight remain constant. The client can also be advised to cultivate a saving culture in his children. This can be encouraged by opening junior savings accounts and giving them piggy banks. They can learn how to save up on whatever little they get in anticipation for future inconveniencies.

 

Teaching the children on healthy financial habits. This is by imparting financial literacy in kids. Through interactive teaching, kids can be taught on the importance of healthy spending and the principles of finances. This knowledge is crucial in creating a strong foundation for children in financial matters. In case of future financial constraints, the children will steer through it successfully. Also the financial literacy given will help the children to develop healthy spending habits.

 

Leading by example. Even though instruction is good for a child, example is worth more. The client should note that he has more influence on the children than he imagines. The children draw guidance and inspiration from parents or guardians. They tend to do what they see their parents/guardians doing rather than what they are told to. The client can be advised to lead a reputable financial management example. If the children observe that their parent has a tendency of spending money objectively, rather than subjectively, they will most probably adopt that tendency.