Home is where kids learn their first lessons, where their parents are their first teachers. It’s where they’re nurtured and loved. As their parent, you always want the best for them. You send them to school, give them presents, and provide for their needs. However, there’s more to giving the world to your child, as there are other things you can do to help them grow as a person.
As young as they are, you have to teach them how to make money as a kid. It’s ideal to strengthen their sense of responsibility and equip them with life skills to enable them to do well in life by being financially literate at a young age.
Cons Of Tabooing The Subject Of Money To Kids
With the state of the world’s economy, one might expect that family discussions are mostly about monetary gains and profits. Instead, it’s one of the most ignored dinner conversation topics.
The sad thing is, some parents are believed to have not given any initiatives on teaching their kids about money. A possible reason for this could be because parents don’t think they’re good enough with financial management to discuss it with their children. Since they think their knowledge isn’t sufficient, they fail to relay the same to their kids.
If you make the same mistake, your kids might regret not learning about financial responsibility at an early age. When they first enter the workforce as a young adult, they may not be capable of facing the realities of moneymaking. As they grow older, financial ignorance could increase their susceptibility to fraudulence, high-interest loans, or debts.
There are numerous consequences of avoiding the subject of money. One may see generation after generation of the youth grow up to be financially challenged, albeit not by choice. They’ll only learn from experience, or perhaps through trial-and-error. Your kid’s only chance is to have a mentor who will introduce them to the world of finance and how to use their resources properly.
The Importance Of Teaching Your Kids About Money
As much as possible, it’s best to know the basics of financial planning, budget building, or cash flow, even at a young age. To do this, you may do simple tactics like paying them a salary and then requiring them (as a test) to return money for mortgages or rent, taxation, and grocery shopping. When they’ve covered the necessities, they’ll realize there’s nothing left over for extra things.
Aside from the possible consequences of not teaching your kids about money, there are other reasons why you should do so. Here’s why:
- Kids Are Capable Of Saving
It’s believed that even at the age of five, a kid is already mentally capable of saving. When it comes to saving money, having their piggy bank or savings account may empower kids to think like investors. In that way, your child could become a habitual saver and financier all through their adulthood.
Who knows? Kids who may have had savings account at an early age could be better off in terms of asset diversification and accumulation.
- Children Gain Knowledge Out Of Experiences
It’s important for parents to listen to their children. Helping your child survive stressful experiences and making mistakes with them is a valuable role to play in their development as a person, as long as your child is willing to listen. Kids should exercise their financial skills while creating their own money-making decisions.
Early in their career, when they learn how to handle their first paychecks and other aspects of personal finances, you should at least guide them to ensure they’re on the right track. Kids will become better decision-makers on matters relating to money when given enough opportunity and provided with adequate information.
- It Is A Habit They Will Need As Adults
Money from gifts or a consistent allowance may not be enough to help your child develop the practices they might need as an adult. Giving them allowances may be ineffective for developing a child’s financial skills. They will only perceive the gains once they’re given real pieces of advice on saving and budgeting related to their allowances.
Parental control on financial management, as well as parental coaching about budgeting and the importance of saving, are the most effective means to keep your child grounded in reality. Therefore, if you offer your children options for saving and spending, talk to them about their choices and give them advice.
- It Will Improve Their Quality Of Life
Money is important in everyday life. It influences where you live, what you eat, clothes you wear, your choice of transport, medical care, schooling, leisure, and many other aspects of your life. It may be extremely difficult to succeed in life if you don’t have any working knowledge of financing. Thus, it might be best if parents never miss the chance to talk to their children about money and finances.
Your kids are watching you earn, spend, and invest your time and money, whether you notice it or not. They must be eager to hear your top tips and advice on the matter. Teach them the basics of financial management as it is indeed a fundamental skill. The earlier they learn this, the more they can improve their understanding of the relationship between work and money.