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Being a parent (in part) is about instilling education, tools and values into your children that can help them to become thriving adults, right? Well, one of the things that will help that to happen is by making sure that they are smart about money.
As a matter of fact, if you are someone who has had some “hard knocks money experiences” in your adult life, you might want to think back to your own childhood. Oftentimes, when it comes to both the good and the not-so-good, we tend to do what was modeled to us and that’s not always what would have been best.
So, in order to help you raise your child to be a financially responsible individual, we have enclosed five fundamental money concepts that you should teach your children just as soon as they can say “dollar bill”:
Money doesn’t grow on trees. OK, technically, in a roundabout way it does (being that paper comes from trees), but we all know what the saying really means. Money is not something that anyone can just wish for and it suddenly appears in large quantities. It’s something that must be earned. For adults, that’s by having a job. For children, that usually starts by doing chores around the house.
It’s a good idea to have a budget. A budget is a plan and without a plan, things tend to get pretty chaotic. When a child is first getting an allowance, you might want to show them how they can use some of it to purchase immediate items, another part to save up for something they really want and still another portion for building up a savings account.
The more you know, the better you’ll do. Adults read finance books and achieve seminars given by money experts so that they’ll learn more about things like stocks, property, retirement funds and setting up a high interest online savings account. This same theory works well for a child when you play money games online with them and then as they get older, incorporate board games like Life and Monopoly.
Get used to banks. As soon as you are ready to open up a savings (and checking) account for your child, make a mini-field day out of it by taking them along with you to the bank. That way, the customer service associate can explain to them (at a level that they can understand) the purpose of a bank and why everyone should have an account at one.
Giving comes back to you. Ebenezer Scrooge was a financially established man who was extremely selfish. It wasn’t until he learned the importance of helping those around him that he started to be a happier individual. The moral to the story (as it relates to this particular article) is this: Having money is fine, but one of the reasons why we have resources is so that we can be a support to those in need. Bill Gates, Oprah Winfrey and Bono are just a few examples of wealthy people who give back. We’ve all heard that it’s more blessed to give than to receive. That is not a fictional tale. That is the honest truth.
Ha! I tell my kids money doesn’t grow on trees all the time but I don’t think they believe me.