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Resources » Finance/Investments » Banking »
Teaching Childrens about money
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As most of us now try to spend less and go on a budget, there is also a need to tech the next generation about the value of money. It was never the case in the past years, but it's never late. So there are quite a few simple principles that need to be teach to the children.
1. Talk about Money: Whenever money is involved, parents need to teach their children the value and analysis behind their action. Money should never be the primary source of discussion, but is one of the most important thing through which we communicate our values and wisdom to our children. Whenever you are purchasing something or making an investment, you need to teach your children the benefits, do and don't of your action. This will give your children an additional boost to their learning.
2. Talk openly about money: Most of the parents keep this as a secret from their children. They may not want to put extra burden on the mind of their children. The only way children learnt about what is a good deal or which one is too expansive is by the experience of what their family earns and what items cost. Hiding the information robs the financial education of the children.
3. Talk factually about money: Most parents have emotion based on their childhood experience. These emotions generally transmitted to the children. Instead of helping childrens, they can cripple children from growing to make sound financial decision.
4. Provide children an allowance they can make real choices with. : Talking about money is important, but they also need real life experience to understand the consequences of their decisions. hence provide them allowances large enough so that they can purchase some of the things on their own. Then continue to give them honest advice and help them to take right decision in the future.
5. Help children priortize purchase: Before purchasing anything on their own, advise them to reconsider their decision. They need to analyze whether the decision to purchase a particular thing is the best option available. Is the purchase better then other purchases.
6. Help children comparison shops: Help them considering issues like cost, quality and conveyance. This will be useful in the near future while comparing prices and quality with different shops.
7. Make children wait before making large purchases: Adults should wait at least a month before making as large purchase. However this is not quite possible for children. Children should not be expected to wait such long. Hence here is a good rule of thumb: Children should require waiting as many days as their age before being allowed to make a large purchase. There is always a tomorrow and over half the time they won't remember what attracted them to it in the first place. Developing this habit will make them resistant to impulse buying.
8. Don't use money as a punishment: Your priority should be helping to give your values to your children, nit buy their outward behavior.
These are some simple principles that need to teach to make their future financial decision sound.
Thanks & Best Regards
Binamra.
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