Learn how to teach your kids personal finances the smart way while they are still young. Here are the common effective teaching strategies on saving and spending money that will really be beneficial to your kids. The smart parents should teach their kids carefully and sensitively on how kids should handles their finances, from spending their allowances, saving extra money and even the things their kids will be more productive and not just wasting time in playing online games or wasting their time using social networking sites.
We all know, children are curious when they saw new things such as computer, tablets, mobile phones and other electronic gadgets. Even some teachers in school admit that the students are cutting classes due to playing online games. To avoid those time wasting habits of your kids, follow this guide and afterwards I will give you the tips on how to teach your kids about finances.See Also: Financial Peer Pressure – Big Problem in Some Social Circles
Kids will be more interested in studying in school rather than playing computer games if, a parent will motivate their kids about the value of education and let the kids think about their future. Second, if the teacher will be more interesting and not boring in teaching his subject matter. It simply means, the role of the parents and teacher are very important to avoid students in being always absent or cutting classes.
Benefits of Teaching Finances to Your Kids
Your kids will be more knowledgeable and smart enough at their young age when it comes to finances. I remember what the bible says –“ Train your children while they are still young and when they grow old, they will never forget what you have taught to them.” If you want your kids to become a money smart kids, train them.
Things Needed When Teaching Personal Finances to Your Kids
Savings account, in trust for account for kids. A birth certificates are also needed in this guide. A piggy banks is a must so that they will be more excited.
How to Teach Your Kids Personal Finances at a Young Age?
Once you have the things necessary, please do the following. This will really be beneficial to your kids, this guide will not only avoid cutting classes or absenteeism, but to teach your kids very well about finances. Remember, what you teach to them will become their future. So, be careful. Teach them what you want them to be – poor or rich.
1. Buy a piggy bank (bamboo may also work), teach them to put money every day in their piggy bank. If you are familiar with the “21 days” rule, follow it. 21 days rule means, whatever you do within 21 days, after those days your habit will be automatic. The critical days in teaching your kids are within 21 days, so don’t stop teaching them the good habit of handling money.
2. Get their birth certificates, go to the bank and open a “in-trust-for” savings account for your kids. Every month give them money to put in their savings account. Let them fill out the deposit slip, fall in line in the counter and deposit the money in their savings account. Do this if they already know how to read and write. If not, you should be the one to deposit the money in their savings account. But, when they learned how to read and write, they will be the one to do the task. Again, let them deposit the money in 21 times, or 21 months.
3. Reward them when they get small achievements. Kids love to being rewarded. Give them money when they do great even small task such as cleaning dish washes, cleaning the garden, organizing his toys, cleaning his own bedroom and most of all rewards him when he achieve something in school such as perfect attendance, passing quizzes or exams, etc.
4. To teach them effectively, you should be the one (as a parent) to show the importance of saving money. As the old saying goes “teach what you preach”. You will never be an effective teacher to your kids if they don’t see what you preach in your actions. Try to stop your kids in saying “bad words” if he heard you saying or yelling with your spouse or other people. Kids are kids, they will do what they saw. They will speak what they heard to other people.
Financial Tips & Warnings
Track the improvement of your plans, to teach your kids about personal finances is not that difficult if you have a clear and specific goal. Motivate yourself to teach them everyday not just about money but doing good deeds. Continue doing your strategies if it’s working and if its not, try to look alternative techniques. But, don’t change your goal, to teach them to become a “money smart” individual. Who knows, someday your kids are billionaires and that’s not impossible especially when they are trained at a young age.
It’s Time to Teach Your Kids Personal Finances
If your child is at zero age, and start investing 10,000 in his “in-trust-for” investment account that earns 12% per annum within 65 years during his retirement, that 10,000 per month investment will turn into astonishing 1.58 Billion, because of compound interest. Although, when that times comes, you’re already in heaven above, it is still great because you know your kids ahs brighter future and living the life they really deserve. Now, you have a “billionaire” child. Isn’t it wonderful?
That’s why, it is not good to teach your kids only about saving and wise spending, teach your kids also about investing money, let them someday be a “risk taker” not just an employee waiting for a paycheck every month. Investing will help your kids to get rich and achieve financial freedom, that will be true if you, as a parent is knowledgeable about investing.See Also: Ask Financial Experts (Money Q & A)