A recent study conducted by the Investor Education Fund (IEF) found that children see their parents as the most-trusted source for financial information. It is quite understandable that children develop the habits of moneymaking decisions from their parents, considering how up until a certain age they only see their mother and/or father pay for items and handle money.
This is why it’s absolutely crucial that you start to elicit fiscal prudence to raise a child that values money and is a saver rather than a spender, even if you aren’t. Children attempt to mimic their parents and that could be a negative consequence of your bad financial decisions over the years.
In a world where money is scarce, the economy is not growing, the debt is ballooning in both the public and private sector and the future does not seem bright, teaching your child how important it is to live within your means is pertinent.
Here are some tips to teaching your child how to be responsible when it comes to dollars and cents.
Education
Don’t expect the public school system to teach children, whether it is inside kindergarten classroom or in high school, how to be responsible with money – rightly so. The parents should always teach their child at any age what money is, how it is earned, why we use it in society and when to save it and when to spend it. It doesn’t matter if the son and/or daughter is five years old or 15 years old, everyone must understand the rules of money.
Role Model
Whenever you head out to the store with your kid, be sure to remember that you’re a role model for him or her. This means that when you enter a store, you can’t be impetuous and start purchasing whatever you want. Instead, carry a list, a budget and only buy what you need and not what you want. The child will learn from this and carry this habit throughout his or her life.
Savings
The good old fashioned piggy bank will suffice for any age. As soon as the child is born, purchase a piggy bank (an electronic one or even vintage) and always teach the kid to put any extra change inside of it because it will accumulate and can be used for a rainy day (or not at all).
Assistant in Expenditures
Forget going to a baseball game. Bring your child to your computer when you’re working on the family’s household budget. Not only do you get the necessary bonding time, you’re also teaching the child your liabilities, expenditures and general household budget. Heck, your child may throw in a few suggestions.
Warnings
Remember, sometimes money can act like Mephistopheles from Johann von Goethe’s “Faust.” A credit card is essentially debt and can hinder any personal financial goals or situation. A loan can be a burden. A lack of savings can be dangerous for an emergency or your future. These daily warnings will stick with your child throughout the rest of his or her life and will refrain from getting a credit card, inquiring about a mortgage and putting a savings account aside.