What are the basic finance lessons that every parent must teach their child
It is a very important role in educating kids as parents is that to teach them the worth of money and its use. Itâ€™s the lesson they likely wonâ€™t learnt in schools and they shouldnâ€™t have to learn as adults in the school like the hard knocks.
The recent financial crisis has underscored the needs to teach children about personal finance. After this entire crisis, it was made realize to a huge section of people that never borrow money that we cannot repay.
Lessons needed to be taught to our kids that aids personal finance are: Money doesn’t grow on trees, it is hard to earn: It has been often noticed that if a small kid is taken to a grocer shop, they are most of the cases confused in knowing the worth of the money. As it’s not their fault, as they often see us punching cards, where we get the money source, take the required items and walk away. It can be understood by them that money is available in plenty amount and very easy to punch them out.
To Reward the Hard work, Money is the prize offered: Young kids often see their parents swipe the plastic cards and may not associate the money we spend that way in which the work is needed to be done to earn it or the hard work toiled for that money amount. One of the best ways to teach kids about the worth of money is to allow them to earn money for their own work whether it is doing jobs around house or meeting their reading or academic goals.
ď ąSaving is important: Make the kids understand that money is important and we should learn to save. Kids are demanding about the latest toys and gifts available to the market that seem fun and exciting. Itâ€™s only natural to want such things. But if we give on to such request then we are not teaching them the lessons which are very important to be learnt and to know how we want things in life. Idea of saving for what we want is very critical and important point.
ď ąSpending means making choices: One of the lessons kids need to culture in their mind that if they buy something now later on in future they need to adjust it with something else. We parents can help them to make early method of learning of how to earn money by their own by arising the interest of gifts and toys. It is seen that kids often nag for candies and chocolates on visiting grocer shops. It is our job to help them think about the goals that they make a smart choice.
ď ąClear idea about the basics of crediting and Debiting :According to the statistics it was really shocking that about two thirds of the Americans do not have the basic literacy about the financial needs according to the most recent studies done by the national financial capability study . They donâ€™t even worth the worth of money. This leads to misuse of the money usage and even sometimes futile drain of money also occurs.
This knowledge will be very helpful in guiding their behavior as that of the age they are grown up. Itâ€™s never too soon or rather too late to teach the kids. Always try to make them understand well about the good choices of the with respect to the money. As kids get older they will be well prepared to face more complex situations in terms of the money related topics for future. So here we offer few money related tips that we can start teaching from today onwards. Lessons taught to our child will be carried forward to their adulthood. Teach them well and with any good luck they will grow up as responsible investors and growers that they want to be and save the society from financial crisis.
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