Most parents believe that they are helping their children make financial decisions by themselves when it comes to giving their kids an allowance. It’s a step in the right direction, but there is so much more to money matters that needs to be taught before a child goes to college. Here are five lessons you need to teach your kids when it comes to finance.
â€œYou can spend your money on a small toy today…or you can save up for a better toy later.â€
Teach your kids the benefits of spending wisely by taking them to the bank to start their first savings account. Explain how savings can help make your child’s life easier, more fun, and a lot less painful when they grow up.
â€œHere is a government bond for your birthday.â€
Bonds are wonderful birthday gifts for parents who want to ensure that their child will be comfy in college. It’s important to explain that this gift is an investment in their future…and to also give your child a toy to make their day great.
â€œThis is how the stock market works…â€
Everyone â€“ and I do mean everyone â€“ needs to know how the stock market works, its importance, and how you can make money off of it. It’s important to get your child to start investing as soon as possible. Warren Buffett started when he was 11, and he is now one of the world’s few billionaires. Don’t you want your tyke to follow in his footsteps?
â€œYou’re wealthy if you want what you have.â€
This is a lesson that both adults and children can use to learn. Take pleasure in the wonderful little things in life, like family dinners, birthday parties, walks in the park, and trips to the beach. If you teach your child to be happy on a budget, you will have a very happy adult.
Teach your child the value of entrepreneurship. If they start learning the basics of business now, they will be much more likely to be successful in any walk of life later on. Entrepreneurship has also been linked with better school grades, a better reputation in both schools and communities, and a higher paycheck later in life. The average CEO makes well over $200,000 a year, you know.