My son is only 6, but I've already taken 6 important steps to protect him financially

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The author is not pictured.

• I didn't learn much about money growing up - we were poor, and I didn't want to ask too many questions and seem ungrateful.
• But I wanted to do things differently with my son, so I've taken six steps to protect him financially and teach him about money.
• I have a will and term life insurance to protect him in the event of my death, he knows how we spend, save, and budget, and he's even getting a taste of entrepreneurship by selling his artwork (and compliments) in our community.
• Read more personal finance coverage.

I grew up poor.

Living in the projects didn't feel like poverty until I was bussed out to a gifted and talented program where most of my classmates had never even seen food stamps, let alone used them.

There were never more than two or three Black children in my class (including me) and most of my peers lived in houses instead of the projects.

I learned that we were poor by comparison, and I was ashamed. Since the other children didn't know that, they'd often make demeaning comments about students they suspected were poor. It is something that has stayed with me.

Even though my mother kept a job on top of side hustles, I never invited my school friends to our place. And I didn't talk to my mother about money until I got my first job at 14. I had so many questions, but I didn't want to seem ungrateful. I understood that money was important, but I didn't quite understand why. More importantly, I didn't yet understand how I could get more of it.

As a single mother, I've taken steps to make sure my son understands the role money can play in his future. Here are the six smartest financial steps I've taken to protect my son.

1. Investing in term life insurance

A lot of millennial parents don't think of insurance when they consider long-term savings for their children. It might be surprising to folks, but term life insurance is a great investment.

Despite some of the myths we learn about term life insurance, it can be a catalyst for a family's legacy. I won't miss the $30 a month that comes out of my paycheck, and my son won't suffer financially if I die before he's able to take care of himself.

2. Giving my son a physical savings ledger

To most parents' credit, we understand the importance of savings. Even the poorest families still get why it is needed - even if socio-economic barriers prevent them from investing in their child's future. I've found that it's not enough to just have a savings account. We also need to teach our kids what it means to save.

This year, I decided to get a physical ledger from the bank. I only make deposits when my son is with me. Even though he can't yet reach the counter, he writes each deposit and notes the new balance.

This practice led to a conversation about the difference between regular savings and emergency savings. We discussed why some people have so much more money than we do. He also asked about why some people can't afford a home. It was surprising how much he already understood about the world.

There are lots of apps out there that teach children about money, but the physical ledger promotes a more acute awareness of what it means to earn, spend, and save money.

3. Creating a will

Much like having life insurance, a will is a way to protect our family members after we pass away. My son is my only child, so there likely wouldn't be any disputes about my estate. Still, it's important to lay out his inheritance to reduce confusion and arbitration over my assets.

Creating and discussing my will as he gets older will help him understand the benefits of planning ahead. It might seem a bit morbid, but I know how much of a financial burden it can be when there is no will.

Dividing up property among grieving family members can lead to bad blood. Instead, a will offers concrete directions that allow the family to mourn in a more civil manner. Disputes may still happen - especially if a family is dividing up debt or tax liability - but ultimately a will can prevent things like foreclosures, vehicle liens, and repossessions.

By having a legally binding will (as opposed to just telling your family your wishes) we can also offer safety. Wills establish legal guardianship so that the state doesn't decide what happens to our children. Moreover, we can set up trusts that mature after our child comes of age.

The specificity of a will is important, and it increases the chances that the designated guardians or beneficiaries are operating in our children's best interest.

Create a free, legal will online in minutes with Fabric »

4. Teaching him to become an entrepreneur

My 6-year-old son does not get an allowance. Instead, he earns money by selling his art. It's not a lucrative business, but he does relatively well for a first grader.

We are blessed to have the means for an allowance, but in my experience, it has been more beneficial to provide an opportunity to monetize his extracurriculars. During church bazaars, thrift sales, and school events, my son and 9-year-old niece have sold lots of things. Their biggest money-makers are original art, African fabrics, and compliments. Yes - my son and niece sell strangers compliments.

At the end of each event, they give me back any money I invested for supplies, then divide the rest of their profit down the middle. It teaches them lifelong financial lessons that most of us don't even get as adults. On the car ride home, they discuss sales strategies, annoying customers, and ethics.

5. Buying a home

We have talked about savings a lot more since buying our first home last year. My son puts about $5 on the water bill bi-monthly. It barely makes a dent in the bill, but it teaches him about how to manage his money. Plus, he feels like he is really contributing to our household.

My son comes with me to visit houses when we help our friends look for investment properties. He has also helped scrape the carpet glue off the floor during our basement remodeling.

In addition to being a unique learning opportunity for my little one, a home is a pretty stable investment. As I make improvements, it's building equity, and paying my mortgage on time boosts my credit.

6. Talking about money

For some families, money is a sensitive topic. This last step may be the most important, regardless of income level. Honesty is so important. Hiding our money problems from our little ones could be detrimental.

While I don't necessarily spend hours each week going through each bill with my son, I do include him in conversations about money.

When he wanted to get a dog, I sat down with him and showed him my budget snapshot - how much it costs to keep our household stable. I let him know how much money we had leftover after things like the mortgage, car, and food.

Then, I had him make a list of all the things a dog would need: food, collar, toys, a doghouse, doctor's visits, walking, etc. We connected either a dollar value or time value. For example: The dog would need to be walked a few times a day. Mom works all day and he is in school, so we would have to pay someone to go to our house and let the dog out.

At first, he was discouraged, but then we talked about saving money and cutting back. He left the conversation super hopeful and we discussed a cat or turtle since they're less expensive. It was simple and practical.

He is young, and at this age his attention span is unreliable at best. My hope is that these conversations make him a less impulsive spender and a more fiscally aware adult.

No parent is perfect. As much as we try to teach our little ones to make the right choices, we still have our own mistakes to learn from. We can give our children the best tools, but the truth is, they'll still stumble. These six financial steps won't always protect my son, but I hope they'll set him up for success as he becomes an adult.

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