Whether it’s a quirk of my generation or due to our constant moving, my wife and I don’t own much “stuff” — and I quite like it that way.

This even goes for our children’s clothes and toys. They have everything they need but little more. We borrow lots of toys and books from the library, and Squish thrives on the novelty of this each week. Much of what they do own was gifted by others, not bought — and most of it will be given away again in time.

Contrast this to older generations, who tend to hold on to belongings more tightly and often find it difficult to declutter. Our elders grew up in a world where houses were comparably cheap, and the things that fill them were expensive.

Our generation now has the opposite problem, with economic headwinds putting housing and other basics out of reach for many, even if flat-pack furniture and decor are as cheap as chips.

As I think about my own children, I’m concerned about the world they will inherit. Unlike the Baby Boomers, who thrived in an era of booming growth, Generation Alpha (those born from 2010-2024) kids are stepping into a world of slower economic progress, higher inflation, mountains of inherited debt, and many uncertainties besides.

In my home country of Australia, projections show GDP growth slipping to just 2.2% annually over the next few decades — a stark contrast to the high rates older generations enjoyed. This slowdown, paired with a rising cost of living, makes many essentials difficult to afford.

Then there’s technology, which is exciting but unpredictable. While older generations settled into steady careers, our kids will navigate jobs transformed by AI and other innovations we can’t yet imagine.

So, what are some ways you can prepare your children for these expected economic headwinds?

Here are a few ideas:

1. Teach them delayed gratification

Introduce small habits like having them save for a toy or earn a reward. In time, they will learn that patience pays off — a lesson that will stick with them for life.

2. Help them handle money

Teach your kids financial basics like budgeting, saving, and investing from a young age. Explain how debt works and why living within their means matters. Start them on an allowance, and help them open a savings account to show them how money grows over time.

3. Encourage entrepreneurship

Support your child in starting small businesses and side hustles — like lemonade stands, recycling for cash, pet sitting, car washing, or online reselling (with your help, of course). In time, these activities will help them build problem-solving skills, resilience, and a sense of financial independence.

4. Invest on their behalf

Because my children are still very young, some of the suggestions above I will have to wait to use — and the same might be true for you. But one thing you can do right away is to invest on your child’s behalf.

These days, many platforms offer low-fee minor investment accounts, also known as custodial accounts. This allows you to invest in ETFs and other financial products by making regular deposits on their behalf. Then, when your children are ready to buy a house or start a business, they will have a huge head start on the competition. Far better that they get financial support when it counts, rather than inheriting wealth later in life when they may not even need it.

Honestly, I used to prefer the idea of only teaching children the skills they need to get ahead themselves without giving them big sums of money. But given the world my kids are inheriting, I have changed my mind — I want to set them up for success.

How about you? What other advice would you give to parents hoping to prepare their kids for future financial challenges? Share your thoughts in the comments section below.

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Image courtesy of Unsplash.