We assume, quite wrongly that our children are too small to understand the intricacies of money. This is where we make the biggest blunder without clearly understanding that Children certainly have an important role to play whenever budget any household is to be set, whether for a month or a year.
By not making Children as one of the important stakeholders of your budget setting exercise, you run the risk of budget overruns in one way or the other. I agree, Children may not understand all the elements of one’s budget but, they surely have a role in determining what they want from their parents in the coming days, months or years.
Although it is an altogether different matter that out of your children/s demands, which one you would agree and the ones you may not agree at all. But before knocking out some of their demands unilaterally, isn’t it wise to involve them in your decision making process. You may have your own reasons to reject a particular demand, but at the same time your children may also put forth some genuine reasons in support of their demand.
Therefore, once you have heard their rationale, it would be easier for you to make a decision. I hope, by now you must be convinced that our lovely Children, for sure have an important role to play on “Money Matters”. That being the case, we as parents, have a duty to teach certain important lessons to our children, such that they act as our partners in implementing the budget rather than working towards its destabilization.
Money can be a tricky topic and therefore, teaching the younger generation money management and personal finance skills is of utmost importance. Unfortunately, not many parents spend time teaching young kids and even, college-going children the importance of budgeting, investing, saving and smart spending. Financial experts recommend teaching kids, aged 5 onwards, about money and personal finance.
Educating children about personal finance will go a long way in reducing debts and foreclosures and improving the overall quality of life. Parents and teachers can make money management, personal finance and investment an interesting part of a child’s life. Not only will kids be money-savvy, they will also be in a position to make better decisions and lead a more empowered life. Parents can lead the way by setting a good example, discussing money matters with kids using easy-to-understand terms and language and by teaching them to save and invest while spending wisely.
Keeping in view the above stated text, I understand this is the perfect time when I can introduce some important lessons which you must teach your children invariably. Let me start with the most important one i.e. teaching the value of money. For some layman, a piece of diamond may just appear to be a broken piece of glass and nothing more. In the similar way, a hundred dollar note will appear to our children just like an ordinary piece of paper, if we don’t make them understand its intrinsic value.
Once our children understand the value of money, it would be easier to teach them the next important lesson i.e. how to handle money. Skills relating to money handling start by first understanding the importance of safe keeping of money, followed by cultivation of judicious spending habits with importance of living within one’s means and finally ending by accumulation of savings at regular intervals.
Therefore, when your child gets his/her first dollar, I suggest that you teach them to save 10 per cent, invest 10 per cent, give 10 per cent and live from 70 per cent. Like a fairy-tale curse, poor money skills can miserably spoil up your kids, their kids and their kids’ kids. Good money habits, on the other hand, can insulate kids from making major mistakes in later part of life and will positively impact their quality of life as adults. So what are you up to, isn’t it the time to call your child for imparting the first lesson on money matters. Go for it right now; remember there is no tomorrow in today’s world!!!