Money lessons for children
Credit to Author: Tempo Desk| Date: Mon, 15 Jul 2019 07:53:31 +0000
ONE of my greatest passions is not only to teach adults but also kids about money.
It is important for us to teach and train them while they are young so they will be able to avoid the mistakes and pains we went through because of the bad financial decision we made from the past.
History should never repeat itself. We as parents often take pride saying to our children that proper education is the only one inheritance I can leave you. Allow me to add, we should not leave them with academics but we should empower them with proper financial education.
So if you are a parent just like me, allow me to share with you the three simple things you can teach your children about money.
- Teach your children to live below their means
The most important money habit to stay out of bad debt is to spend less than what you earn. If you spend more than what you earn, then all that you are likely to acquire is just more and more debt.
From peer pressure, to the latest advertisement of highly creative marketing companies, they are bombarded with external pressure to spend. It takes a lot of self-denial and self-discipline to prevent oneself from overspending.
And this is why we need to train our kids in this aspect. As we all know, the consequences of overspending behaviors are disastrous for their finances. We need to teach them to underspend and live below their means.
- Teach your children to increase their income opportunities
It is inevitable for one to meet unforeseen expenses. This is just real life. Sometimes, even when we have exhausted all possibilities to cut our expenses, we still can’t seem to make ends meet. In this case, it is important for us to be open-minded to the idea of increasing our income. And this is something that we need to teach and train our kids to do too.
We can increase income by having additional work, changing jobs, learning new skills, going into sales as a sideline, or selling old stuff. Having a regular job with a regular income is good, but sometimes, it is just not enough.
We have to train our children to always be on the lookout for good income opportunities. We have to teach them that they will never be able to find such opportunities if they do not look for them.
If you were to teach just one money habit to your child in combating bad debt, let it be this. This can make a huge difference in the financial future of your child.
- Teach your children to pay everything in cash
I am so thankful and grateful that my parents taught me that I should only buy what I can afford. They taught me that I should never buy anything with the money that I do not have.
It is unwise to resort to borrowing just to be able to support the lifestyle that I cannot afford. And this is the reason why I grew up with the habit of buying almost everything in cash.
You might be asking, “Chinkee, are you saying that you don’t use a credit card at all?” Well, yes, I have one, but I only use it for emergency purposes or for convenience’s sake.
Whenever I do use my credit card, I make sure that I pay everything in full, immediately. I make sure that I have no outstanding balance, so I won’t be slapped with interest or charges.
Let’s all teach our kids that they cannot spend the money that they don’t have. If their wallet is out of money, then this means that they cannot afford whatever it is that they want to buy. The habit of borrowing – which is also what happens when one uses his or her credit card – for one’s own personal consumption will only lead to bad debt.
Your child needs to understand that a credit card is not cash.
If you just teach these three simple things about money, I can assure you that your children will grow up to become wealthy because he is financially responsible.
THINK. REFLECT. APPLY.
Do you teach and train your kids about money? What do you think you can apply from these three money lessons?