Many parents underestimate just how many things they have to teach a child. From the early basics of manners and potty training to more advanced things, such as having empathy and how to deal with hard life situations, the list goes on and on. That’s why many people neglect areas like financial training.
What else should parents be teaching their kids in regard to finances? Here are four lessons everyone should learn and pass on to their children.
1. Give Every Dollar a Job
Kids need to learn that every dollar needs a purpose from early on. This can be taught when your children get an allowance and birthday money. A portion should go to savings, giving, and spending.
2. Say No to Impulse Buying
Saying “no” to kids when they want something in the store is hard, but it’s disastrous if a child gets used to impulsive buying. Instead, help children come up with a savings goal for a particular item. If they are saving $50 for a special toy, then they need to know that $2 impulse buys on candy or smaller toys will ultimately delay their saving goal and make them less happy.
3. Learn How to Comparison Shop
Teaching your child how to take the time to do research will help their money go further. A new tablet might cost $250, but if they shop eBay or Amazon, they can get a refurbished model for half the price.
Along with comparing prices, teach kids to look up reviews on items. It’s awful to pay a lot of money for an item that doesn’t work like it is advertised. Taking time to research the product beforehand can prevent wasted dollars.
4. Learn How to Bounce Back from Mistakes
Even though you want to equip your child with financial wisdom, there is a good chance they will still make silly money mistakes. That is okay. It’s especially important for kids to make money mistakes now, when only a few dollars are at stake, rather than later when much more money is at risk.
If your child is insistent on buying that low-quality toy or wasting their savings at the arcade, then let them try it. Hopefully they will learn that spending money in this manner doesn’t make them as happy as they thought it would.
The best way to teach your kids to be financially wise is to be an example for them. Don’t be afraid to talk to your children about your finances or about money mistakes you made when you were younger too. Your experience is extremely valuable, and not just to you.
Article Source: Ashley Eneriz for MoneyNing.com