Always remember that money smart means life smart. The financial knowledge that you will impart to your children will stay with them for life.
Parenthood is not only about working to provide money for education. Itâs also about teaching your children sound money lessons.
When you become a parent, your perceptions of money and education change. Apart from saving money for education at their future universities, you have to consider how to become the best money instructor for your children. You want to give your child the best materially – but also to be a practical example of financial knowledge so that he will grow up to be money smart.
After all, as many parents can testify, as soon as your first child is born, your life changes drastically. Not only do you kiss goodbye to sleeping late in the mornings and need to change endless diapers, but your financial picture is altered as well. As children grow up and outgrow diapers and baby food, families incur different kinds of expenses – school books, after-school activities, and various gadgets that are “indispensable” for their social life.
As you find yourself trying to stretch every dollar in order to accommodate your family’s needs and wants, present and future bills and saving for multiple goals, there’s one very important gift that you can give your children: financial knowledge. If you teach them about financial planning and the importance of money, when they grow older they will increase their own odds of living a fiscally responsible life, and be able to support their own families.
Be their money instructor and begin teaching your children about money from when they are very young. When they are very little, show them pictures of money. And as they get older, every request for “Buy me…” shouldn’t necessarily be met with a purchase and shopping bag. Children need to learn that money is an earned commodity, not an automatic right. While money’s intrinsic value is useful in acquiring things, children need to be taught that money also has value when shared (given to charity) and saved.
If you give your children an allowance, getting them to put some of it inside a savings box each week shows them the importance of saving. And if your child wants to buy a new toy, coaching him to put some money aside until he has enough to buy it, not only teaches delayed gratification, but the good fiscal habit of only buying an object when you have the funds for it.
Encouraging giving charity with all earned income and gifts teaches the traits of kindness and communal responsibility. Ideally, any time your child gets a monetary gift, his first thoughts should be about giving charity and savings. Only after these two requirements are met, should he think about spending.
Educating your child in the importance of these values is a lesson for life, and passing along solid financial knowledge may be the strongest legacy you can leave your child. It is never too young to teach your child either. For more advice, read my article:
Disclaimer: This article is for educational purposes and is not a substitute for investment advice that takes into account each individual’s special position and needs. Past performance is no guarantee of future returns.