Financial advice isn’t typically something most parents consider talking to their children about, but it’s something no parent should ignore. Sound financial advice from an early age is going to help your kids learn the difference between being responsible and being careless with their money. What your children learn from you now regarding financial information is what they’ll take with them into adulthood. Don’t deny them the benefit of learning healthy financial advice early on.
One of the best lessons your children can learn is that money cannot be spent until it is earned and in hand. Teaching them this requires a little dedication. The next time your child asks you for the new cool toy on the market, tell him or her that once they earn the money to purchase it, they can have it. Don’t let them “owe” you part of their allowance or side-job money and buy it for them. Make them earn the money themselves so that they learn the kind of patience required to make good financial decisions.
Savings is Important
Your kids might make a point that their birthday or holiday or job money is theirs to do with what they please, but you are still the parent. This means that at the moment, you can require they do anything with it that you want them to. Make it a rule that half of everything your children earn goes into savings and is not touched. When they run out of money because they’re neglectful with their financial planning, then that’s another lesson they’ll have to learn.
Let Them Make Mistakes
Oftentimes it’s personal experience that provides the best lessons. If your children are allowed to make financial mistakes, they’ll learn important lessons before it’s too late. For example, if your teenage son decides to spend all his money on a new shirt and doesn’t get paid again for two weeks and can’t afford to take his girlfriend to dinner this weekend, don’t bail him out. It’s far better he learn the importance of budgeting and saving and planning now than in the future when his mistake costs him a negative report on his credit score.
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