Just like GMRC, financial literacy needs to start at home.
According to experts, an economic crash is most likely passed on from one generation to another and another. In a nutshell, dealing with a simple text loan that ties you up and gets you broke is something that your children might adopt from you at some point in the future.
As parents, your goal is to raise financially-smart individuals, who are capable of meeting their financial obligations while saving money for their own retirement. If you want your kids to follow this fate, make sure you prepare them for tomorrow while they are young.
Luckily, we live in a digital era where learning at a younger age is so much easier and faster. Parents can start educating their children about proper saving and spending at a young age — but not as young as 2 because that already seems like overkill.
A financial crisis is not something that happens every day. It would just roll in without a warning and that’s where parents can help. Here are simple tips on how you can let your kids master the art of good financial habits.
For starters, involve your kids in household chores.
Trust us, not all children will have the interest to do some chores at home. So, how about a little reward like candies, coins or new toys as a motivation to work hard? Not only does this trick help kids understand the value of hard-earned money, but it also teaches them to become responsible children at home.
Teach them through actions.
Children tend to adopt a lot of traits and actions from adults. That said, parents should be very careful about how they act, especially in front of their kids. Avoid discussing personal or business loans and any other types of money securities while kids are around.
This way helps prevent children from discovering the tempting use of loans and learning to depend too much on these borrowing options in the future. While you can educate them about it later in time, make sure to cover significant topics including the benefits and proper utilisation of loans and the importance of paying them off ahead of time.
Encourage them to save at an early age.
Teaching children the value of saving will prepare them for financial stability in the future. Start with simple saving tips at home. For instance, budgeting, conserving energy and tracking expenditures. You can teach them to save money out of their allowance.
Let the children understand that just because they have money, it does not mean they can spend it all right away. Encourage your kids to save more by rewarding them every time they get to save their spare coins. You can also take them to the bank with you so they could have an idea of how saving in the bank works and what perks to enjoy from doing so.
Let them know about sensible spending.
It is crucial to train your children about sensible spending before they even land a job. Give them budgeting tips that are relevant to their age. When they reach senior high school or college and start an internship, chances are that they will start to move out and rent a shared space with their classmates.
That’s the best time to boost their budgeting, spending, and saving skills to survive a semi-independent life. You can also help them to start earning their own money through hard work by doing a part-time or summer job. This way helps them understand the hard work of earning money and that spending should always be taken into consideration.