Free Range Children and Risk

There are many busybodies in the world

It is becoming a near daily thing that some parent has been accosted by authorities because a child was allowed to go to a park or walk to school by themselves. If we are trying to raise independent and capable adults, I am not so sure the intervention helps.

Self government and risk assessing is a learned skill

Experience is great teacher. If society thinks children can be immunized from the real world, they will learn differently in a decade or two. Worse still, parents may adopt the over-protective manual and do even more harm.

Children should be lead, not micro-managed.

Like adults, the learn little from things that go right. They learn a great deal when things go wrong. Provide them the opportunity to have things work out differently than they had hoped.

Give them an allowance in exchange for work. Help them understand how saving works and how expenses are lumpy. Let them spend it as they wish, but don’t bail them out when they overspend and then don’t have the money they want for something else. Maybe a birthday present for Mom, or a special toy, or sports equipment, or a concert ticket.

Encourage them to play sports, or take martial arts, or dance classes, or learn to draw or play the piano. The idea is that parents cannot buy them skill. They have to practice and learn from their mistakes. You cannot become an artist with someone leaning over your shoulder correcting each brush stroke.

Address real risks

If the busybodies were as vigilant protecting children from real risks, we might get somewhere.

  1. How many parents have too little life or disability insurance to guarantee the child will flourish if something adverse happens to them? Answer – nearly none. Some adversity builds character, but poverty is not a good teacher.
  2. How many parents have a safety fund in case they lose a job?
  3. How many parents have adequate resources to deal with a seriously sick or injured child? Not many. Most would be forced to take leave from their job or acquire expensive external care.

I wonder why some risks are social issues and others are not. Perhaps there should be a government study and 300 page rule book.

The foundation of financial plans

Risk of loss of the primary asset, your income, must be addressed. Insurance is inexpensive compared to keeping the risk yourself. Bill Gates could afford to self insure his house. You probably cannot. Your career is worth a lot more than your house.

Talk to an advisor about comprehensive risk assessment and reduction. Even sick children might be covered if you have child Critical illness coverage in place.

Risk management is just organized common sense. The potential saving of doing nothing requires you to be lucky to gain the benefit. Luck is uneven.

As a client once told me, “I believe in miracles. I just don’t like relying on them.”

I arrange life insurance for people who understand the value of a life insured estate.

In previous careers, I have been a partner in a large international public accounting firm, CEO of a software start-up, a partner in an energy management system importer, and briefly in the restaurant business.

Please be in touch if I can help you. 705-927-4770

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