Teachers are not the only educators in a child’s life. Parents should teach their children, too, especially when it comes to money.
Were you aware that many people have no money when they retire except for their monthly pension? It’s sad but true. After working most of their lives and having earned hundreds of thousands of pounds, they have almost nothing to show for it when they reach retirement age.
So how did the majority of their money vanish? It actually passed straight through their fingers, perhaps on extravagances like travelling or luxury meals out, and it’s so easy to let happen.
While schools are great at maths, many students find themselves without the basic skills when it comes to budgeting and tax. The sooner you support your children to look after the money, the more likely they are to be able to take care of themselves properly, in the financial sense, and live a comfortable life.
So why not educate your children, teaching them the basics of budgeting? Here are seven essential lessons to instil in your kids:
1. Save some of your earnings
Getting into the habit of saving each and every month is one of the most important things you can ever do.
If you’re in your 40s, imagine how much you’d have in the bank today if you’d set aside 10% of all the wages you’d ever earned in a savings account. It’s a bit scary to think about that, isn’t it?
Encourage your children to save a little from the money they are given or earn, for example, pocket money or chores.
2. Don’t borrow what you can’t return
Debt is one of the most difficult things to escape and more and more people these days seem to find themselves struggling with it. The ‘buy now, pay later’ philosophy seems to cause more problems than it solves, meaning the person in debt may well pay later in a more serious way.
Debt can cause high levels of anxiety and can create an almost never-ending cycle. Plus, you’ll never become financially stable, or rich, while in debt.
Teaching your children about the benefits of “Good things come to those who wait” is vital, as is the saying “If in doubt, go without”. This saying is applicable at birthdays and Christmas time when you really shouldn’t feel pressured into giving more than you can afford.
3. To give is to get
Managing money doesn’t equate to stashing it away, refusing to spend it, like a modern-day Scrooge. Moreover, it’s about thinking carefully before making purchases and saving regularly and wisely.
Though it may seem strange to teach your children that donating money to charity is a beneficial thing, it is a way in which many people can benefit, including your kids.
4. Money isn’t the devil
“Money is the root of all evil” is a phrase that is often heard, particularly when people are discussing the problems associated with debt and overspending.
This isn’t true though, and not addressing this misconception with your children could be damaging.
Money actually helps the world in a variety of ways, including:
– Wealth helps to create job opportunities
– Business investment can lead to product innovation offering solutions to people’s everyday problems, making life better and easier
– Acquiring a large sum of money means a substantial amount could be given to charity
5. Spend less and lose less
“It takes money to make money” is one of the oldest mantras there is when it comes to money.
Unfortunately, people need money in order to lose it, too.
Teaching children to be cautious when dealing with financial matters is imperative. Remind them that many self-made millionaires actually started their businesses with almost nothing. Keeping abreast of money saving opportunities is vital.
6. Go for the best price possible
How financially healthy you are depends entirely on how much you earn compared to how much you spend. Avoiding paying more money for items than you have to can help your financial situation. When purchasing large items, check around different stores looking for the best possible price. And, don’t forget that if you don’t ask, you don’t get. Some shop assistants have the ability to give discounts, so haggling can save a lot.
Remind your children that shopping for bargains does not make you a miser, merely sensible.
7. Quick money usually ends badly
We all see sure-fire ways of making a quick fortune, whether it’s someone’s MLM business or another internet scam. If it sounds too good to be true, it usually is.
Teaching your kids that the vast majority of people must work hard to make their money, reminding them that a quick money-making scheme is rarely a good thing, is another essential lesson.
If you’d been taught these seven lessons when you were younger, do you feel that your financial health would be better now? Absolutely. You might even be the proud owner of a beautiful house by the sea. Teach your kids young and remind them about the importance of saving as well as making sage decisions.