Single mothers have to learn a variety of important lessons in order to achieve financial freedom, and you can make life easier on your children by helping them develop good habits from a young age. Kids who are introduced to personal finance early generally find it easier to manage their own money later in life.

This article will cover some of the most critical financial lessons you can teach your child. Make an effort to have regular conversations about money so that they understand the impact a healthy financial mindset will have on their life.

Credit Card Debt Is Bad

Consumer debt has been essentially normalized in the United States, and many people don’t see a problem with credit cards, student loans, or other forms of credit. While going into debt is sometimes the best choice, it’s important for people of all ages to understand the risks involved.

Credit cards, for example, typically come with interest rates of up to or even over 20 percent. Paying back a large credit card debt can be extremely difficult since the balance will continue to accumulate interest over time. It’s generally much better to avoid debt in the first place than to try to pay it back later.

Tip: Start an Emergency Fund

We often feel like debts are unavoidable in unpredictable circumstances, but you can prepare for these situations by contributing to an emergency fund. Your child should understand the importance of consistently saving money and having some cash to fall back on in a worst-case scenario.

Without an emergency fund, people can be forced into debt to pay for unexpected costs. While you can help your child by starting a savings account for them, it’s much more important for them to develop the habit of saving on their own and taking a more proactive approach to personal finance.

Consider Early Retirement

You probably don’t spend much time thinking about your child’s retirement, but it’s never too early to start considering their financial future. Putting off saving for retirement is one of the most common mistakes in personal finance, and it’s difficult to make up for lost time if you don’t start making contributions from a young age.

In contrast, putting extra money away for retirement is a great habit that will help your child reach his or her long-term financial goals. Twenty, for example, might seem too early to begin saving for retirement, but even just a few hundred dollars each year will make a significant difference over time.

Tip: Set up a Roth IRA

Most people assume that 18 is the youngest age at which people can contribute to an Individual Retirement Account, or IRA, but there’s actually no minimum age associated with these accounts. People of all ages can make and contribute to an IRA as long as they have at least some earned income.

While standard IRAs allow you to make contributions with pre-tax income, the money you put in a Roth IRA is not tax-deductible. On the other hand, contributions grow tax-free and aren’t subject to taxation when withdrawn during retirement.

Roth IRAs come with relatively low contribution limits—$6,000 in 2019 and 2020, for example—so you miss out on the tax advantages whenever you fail to make the maximum contribution. In contrast to some other retirement accounts, Roth IRA funds can be withdrawn at any time with no penalty.

In addition to the tax benefits associated with Roth IRAs, the money you contribute will typically grow much more quickly than in a conventional or high-yield savings account. Investment accounts carry more risk than accounts with fixed rates, but short-term fluctuations are generally outweighed by growth over time—especially when investing for a long-term goal like retirement.

The Importance of Budgeting

Many people avoid thinking about their finances because they’re worried about what they’ll find, and financial anxiety is one of the biggest obstacles toward developing a better money mindset. Simply reviewing your statements and understanding where your money is going is arguably the most important step in improving your approach to personal finance.

Without a clear budget, it’s easy to lose track of how you spend your money and end up consistently falling short of your personal and financial goals. You won’t even know what kinds of spending to cut back on if you’re interested in saving more money.

Tip: Start Budgeting Early

Rather than shifting to a budget later on, your children should understand the importance of a budget from a younger age. That way, they won’t have to adjust their financial habits to start working toward long-term financial goals like college and retirement.

Getting started with budgeting can be complicated, but there are more resources than ever before to help novices learn more about creating a budget. While there’s nothing wrong with budgeting in a notebook, your child may adjust more quickly using a website or mobile app.

Most kids aren’t as excited to save as they are to spend, but you should teach good habits by putting some of their allowance away. It’s important for children to see saving as a financial priority rather than something to do with any money that’s left over—people who think of saving as optional often have more trouble sticking to their targets.

Everyone has their own experience with personal finance, but you can get your children off to a good start by teaching them about money from a young age. These are just a few of the most important topics to cover as your child begins to learn more about personal finance.