Teach Your Kids How To Look After Money
It is a sad fact but many people retire only to live in poverty. After working forty odd years and over that time earning hundreds of thousands of pounds many have very little to show for it. What happened to it all? Well, most of it would have just slipped through your fingers. Why? Well, schools are very good at teaching us many different subjects including maths, but the one thing they do not teach is personal finance and how to make money work for you rather than you working for money. So where can our kids learn about personal finance? Well, it is up to us as parents to teach them. Trouble is many adults are not too good at looking after money either, again because we were not shown how to in our youth.
Let us face it in most households money matters are not discussed between parents and children. Now I am not suggesting that we start showing mortgage and bank statements as some parents, especially with pre-teens and teens, may find an admission of their financial status embarrassing. What we can do is advise our children of the pitfalls and dangers that await them in later life. Draw from your own life experiences and dealings with banks and other financial institutions. The fact that at certain times in our lives things are going to happen that will affect our personal finances.
Certain things will be out of our control and not of our own making, but there will be times where a choice has been made that "seemed like a good idea at the time". We have all been there, done that, only to pay a price at the end. So, how and when do we start them off? As young as possible, usually by the time a child is about 3 years old they know about pennies and pounds and understand the concept of handing them over in order to purchase goods. Hand over enough pennies and they get the lollipop they want at the sweet shop. Here are some tips and ideas to help your kids start on the right path to financial prosperity. * Buy a piggy bank for your younger children. Allow them to choose whatever colour shape or size they wish. Invite them to put their pennies into their piggy bank. Occasionally they may count their pennies and reward themselves if they want. * Once they have proved themselves adept to handling their pennies, take them to open their own bank accounts.
Most major high street banks and building societies have special savings accounts for kids. Depending on their age group, they may be offered some incentives e. fun packs, money-off vouchers for CDs, DVDs, computer games, etc. * Many kids think, "money grows on trees". Let them know that YOU working brings about this paper and metal stuff called money. Whether or not you work or you have inherited a large fortune, do not encourage laziness in your child. I am sure there are loads of chores around the house, washing the dishes, cleaning the rooms, etc. Give your kids an allowance but let them work for it. They also need to be able to work for free sometimes to learn the value of hard work.
* Many relatives nowadays tend to give money for birthdays and Christmas especially for the over 10s. At this age, their tastes are constantly changing (what a 12 year old and a 60-year-old see, as being "the in thing" is usually very different!) Encourage them to save 10% of their money gifts. If they are older and have a paper round or something similar, again encourage them to save 10 % of their earnings. This may be only a small amount but it is a good habit to get into. If you are reading this now, as a middle-aged parent, imagine how much you would have in the bank today if you had saved 10% of everything you had ever earned. Scary stuff! * Managing money does not mean hoarding it and locking it away forever. It simply means being careful, spending wisely, and acquiring a regular savings habit. Teach your kids that donating money to worthwhile causes is a noble thing to do. This could be to the local hospice, the homeless, or to a charity of their choice. This would help them become more rounded, more respectful of others regardless of the situation and become more appreciative of their own lives and their own prosperity.
They would learn that the money returns to you in more ways than you could imagine. * Encourage your child to purchase a journal or a diary where they can record their dreams and desires. This allows them to dream big and look forward to their lives ahead-filled with prosperity. There is nothing wrong with accumulating wealth to fulfil these desires. Money is not evil! * "Filthy lucre" and "Money is the root of all evil" are phrases you will often hear people say. Ignore them. Money actually brings enormous good into the world. Creating wealth helps create jobs for others. Investing in business helps to bring solutions into people's lives by way of innovative products and services.
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