Many of the lessons you learn in your formative years will often stay with you for the rest of your life, which is why it is so important to teach your kids about money so that they can become financially savvy adults.
Here are some insights and tips on the basics of financial management that you should be trying to instill within your child’s psyche from an early age. There is a look at the importance of teaching them financial lessons, ways to encourage a savings habit, and why what you do with money will shape their future habits.
No one wants to be financially illiterate
We are taught how to read and write at school as well as basic math skills but one thing that seems to be sadly lacking in the educational curriculum is some lessons on how to handle money when you are an adult.
The only way your children are going to find out about how bank accounts work, how to use credit cards and how to build a good credit profile, is if they find out for themselves or you take the trouble to teach them.
Teaching them early is the preferable option as it means that they have a better chance of avoiding some financial mistakes along the way as part of their learning curve.
There is a good chance that you have made some financial mistakes in your life that you learned from, so it makes a lot of sense to impart this wisdom to the next generation and give your kids the chance of a head start, by understanding what they are doing with their money from the get-go.
Get them into the savings habit
Starting kids off early with a piggy bank is a great way of teaching them the discipline of saving for something they want and understanding that you can’t always have everything straight away.
Most children feel really pleased with themselves when they see all those dollars they put away from gifts and doing chores, turn into a sizeable sum of money that is enough to buy what they have been saving up for.
Encourage your children from an early age to develop a savings habit and it there is a good chance that it will stick with them when they are adults.
Lead by example
Your children will learn a lot of their life skills from you and it is down to you to try and set a good example.
If your finances are a bit chaotic and you don’t often have any second thoughts about using your credit card to pay for meals out or the groceries, there is an increased risk that your children will copy this attitude and could result in them overspending and running into trouble.
If you have a stack of credit cards in your wallet, one solution could be to transfer all of your balances to one card to gain better control. Another good idea would be to try and show some restraint with your spending on these cards and talk to your kids about how interest rate charges work when you borrow money in this way and don’t pay it all back on the due date.
Money doesn’t grow on trees
How many times did you hear your parents say that to you?
The fundamental point to get across to your children is that money has to be earned and doesn’t just get given to them. If they grasp that concept and develop a healthy respect for money because they have had to earn it by doing some chores around the house, this can only be a good lesson for when they have to fend for themselves as an adult.
Sam Bentley has 3 kids; 2 sons and 1 daughter and he is intent on raising them to be honest, well-rounded individuals who can stand on their own 2 feet in life.