Educating kids on finances is simply the sure way of helping them achieve financial excellence in their adulthood. It is better to start early educating kids than to start later on. Fruits planted or inculcated into the kids in the early days grow more than those inculcated in the future days. When it comes to kids’ financial education, there are certain important things parents should know in order to do better in educating their children financially. Below are the parent guide to kids and money. They will help you in putting your children on the pathway to handling finances responsibly.
The sooner you start teaching your kids about money, the better for you
Kids have the tendency of spending money as though it grows on the tree until they begin earning a living by themselves and sometimes until they start even beyond that. By understanding this, you will be able to direct your child on the pathway to responsible money management.
Children become money conscious long before they learn how to add and subtract. Even 4-year old folks know that their parents got the money from the ATM. However, it is yet a different thing for them to understand that their parents actually worked for that money. More so, they learning curve is not really straight when they begin to learn. For instance, a 5-year old kid would literally expect his father to come home with money after each day’s work.
When children learn the working mechanisms and principles of money, they tend to be conservative instinctively
When children learn that they can use money to purchase some of the things they want like toys and candy, they begin stocking up all the money they can lay hold of. Of course, it gives them instant gratification but even without that, they develop instinctive conservatism to do so. You can make your child become a super financial manager by channeling this urge in the right direction.
Seeds bear fruit early when planted early
To get the best result, you have to work on your kids’ financial awareness at the early stage. When they get to the teenage age, they may not be able to listen to your advice anymore. At such age, they tend to get busy in doing a lot of things which also includes spending money they way they think best.
Leverage the concept of allowance to teach your kid better
You can train your child for the days ahead by leveraging the concept of allowance. Giving your kids small amount of money when they are young will help in getting them ready for the days ahead. This will prepare them in handing the money effectively when the number gets bigger.
College-age kids and teenagers have bigger responsibilities
College age students handle checking accounts, credit cards and debts as much as they do to their books and parties. High school students will become shrewder in handling finances and various other things involved in the financial market when they leave the academic environment if you teach them about banking and credit during their college or high school days.
Investment should be learnt at an early stage
Investing is not usually included in the academic curriculum in the high schools and universities. However, it is critical to financial success today. Many people study all they can without knowing the basic rudiments and concepts of investing. This usually results to breeding of poor investors in the society. It is very vital to teach high school students about the market and how to use real money.