Give your kids a head start on money management

Many of today’s wealthiest people owe their success to what their parents advised them about money. So, what advice would you give your children about money? Here are seven points of financial advice for parents to give their children.

1. Treat money with respect

In real life, money is earned. Because there is so much work and effort put into earning money, children must learn to consider it with high regard. Children must understand that there is a cost to their lifestyle – mom and dad put in work long hours at work, spend sleepless nights, and run endless errands.

When they understand that their parents work hard to buy their toys they will approach money matters with respect as they grow are older. Children who learn this early in life become wise concerning their wealth.

2. Don’t try to keep up with the Joneses

It’s not how much money you make. It’s what you do with it that counts. Many pitfalls toward financial turmoil occur when people compare their earnings with how much others make. This creates a mindset of ungratefulness and discontentment.

Train your kids to practice thankfulness. Teach them that the rewards in life are not in the amount of money but in the wisdom, they use to live meaningful lives. Children who learn to focus on their own matters harness their energies wisely for their own benefit.

3. Live within your means

One piece of conventional wisdom today says, “As your paycheck rises, so should your lifestyle.” Well, no, actually. I don’t agree with this at all.

As your children begin to work, it is important that they understand the importance of living modestly. Just because they can afford something they like, it doesn’t mean they should buy it.

This is where children should understand the difference between needs and wants. The key to living within their means is discipline. One practical way is by teaching them how to budget.

Be creative and make it fun for your child to budget. As they grow older, they will be able to live within their means.

4. Save money

Saving gives a healthy restraint to spending at the onset. Additionally, it prepares your child for unexpected instances where money must be spent as in an emergency. Saving is a deposit for your child’s future.

Let your child practice saving early on by having a piggy bank at home and then by opening their own savings account at your local bank.

Don’t work for money. Let money work for you. In order to create wealth, you must have multiple streams of income. Teach your child that there are ways in which money can be earned passively.

6. Pay your credit card balance in full and on time

This is a tricky one. And it will only work for your child if healthy habits are in place. Teach your children to pay their credit card balance in full and on time.

This habit will improve your credit standing and the rewards granted by credit card companies will be highly beneficial to your child.

Furthermore, many of the things they need or want may be obtained freely through exceptional credit standing.

7. Give

One of the best attitudes towards money is that your wealth ought to be shared for the benefit of others. Teach your child the value of helping someone in need.

Explain to them the reason why they it is good to help others and how serving others grows one’s love and appreciation of a person’s intrinsic value. For example, if your child likes animals, donate to an animal welfare centre.

Children who learn to give will grow up to be responsible, conscientious stewards of wealth. Teaching financial literacy to your children is a process. Guide them through their financial journey in both the triumphs and failures.

Also, partner with them for their growth, development, and success. Through these tested pieces of advice, money will serve you and your children and not the other way around.

This article first appeared in thenewsavvy.com

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