If I had a dollar every time a parent asked me to tell my children about money, I would be a millionaire. There are many different aspects of money management that you can tell your children. Here I will share with you what I believe are the seven most important goals.
1. Money can be exchanged for goods or services.
This is one of the first lessons you should teach your child when they are old enough to understand - they are usually 3 years old. The next time you go down to the corner shop to buy one or two items, let your child pass the cash. By doing so, they will gain a great deal of appreciation for the idea of being able to exchange money for the things they want or need.
2. One must be careful about money.
Some people I know seem to think that any coins worth less than 50 cents are too small to be disturbed to use, so when you clean their odd change around the house, you will throw these little coins in the bin. What a waste! Please encourage your child to be aware of all the financial plans, and show them how those small letters can fit together, starting with a small family box. Maybe you can use this money to support small family outings (a trip to the store to get ice cream).
3. Money must be earned.
There are so many people in the world these days that it seems they never read this lesson. They sit around the house waiting to be given money to survive or turn to a criminal life to support their existence. Be careful not to give your child money every time they ask for it, without expecting anything in return to complete household chores.
4. Encourage one-third savings, third-party contributions, one-third use.
The exact amounts when your child divides their money are up to each family to decide, depending on their beliefs and the needs of the child. This can be easily achieved by giving them 3 piggy banks or cash boxes - one for spending, one for saving, and one for donating.
5. Avoid borrowing money where possible.
The sixth rule of thumb if you don't have the money to buy it, you can't afford it! It is always more difficult to repay a loan than to keep your money. Some loans, such as home loans, are often unavoidable, however. The s
6. Money is not your best friend, so don't let it control your life.
It is effortless; try not to over-indulge in your finances until you are forced to work 60 to 70 hours a week to continue living. When you do that, you are letting money control your life. You usually do not need a luxury car (and car loans) or overseas holidays (and personal loans). All of these things are great, but only if you can afford them!
7. Show them how to budget and live within their means
This is one of the most important skills your child should know that most people don't seem to know how to do. Recent research has shown that most people spend 10% to 20% more on what they earn. They earn enough money to support their lifestyle, but they do not simply budget and thus spend a fortune each week.
With these seven lessons under their belt, they will get off to a good start, but there are many financial skills your child will benefit most from learning. To learn more, visit the Kids Money Tips website.
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