Do you desire to know 10 reasons you should teach your kids personal finance? This article is the ultimate guide for you. So, here we go!
Charity they say begins at home, so as a parent, it is also your responsibility to teach your children important kids personal finance lessons. It doesn’t matter how little the effort you put in towards this aspect because, a little information or training you give to them can go a long way in setting the course of their lives forever.
Frankly speaking, a lot of financial problems today would have been avoided if financial literacy was taught at an earlier age.
This is because the way we spend money is out of habit, meaning we learn it. That is why it is important to catch these little ones while they are still young. You can start by giving them pocket monies.
Do you know the number of people on student loans or those that are still battling with it even after college? research shows that six out of ten students are on student loans yearly. Now imagine how your child’s life will be without all the complications caused by money problems like debts, overspending, etc.
These kids could have saved thousands of dollars even before they are done with college, they will be able to invest in the life of their choice, have successful businesses, own homes, and buy cars at a very young age.
If you are one of the few that thinks “oh but that’s not possible” then you are late to this game darling. Because, the last ten years has gotten an increasing number of young billionaires who made their money by following the basic rules of savings, investment, and budgeting and applying them in their various careers and businesses.
Living a debt-free life is one of the best lifestyles anyone can embrace.
When you teach them early, they stand a chance of getting the most out of it. This is because they have more time to practice and benefit from all you have taught them.
These kids are the leaders of tomorrow, years from now they’ll be the doctors treating you in the hospital, the ones governing us, and making decisions that will affect us later. We don’t want them bringing their financial frustrations to work, neither do we want them living from paycheck to paycheck and relying on credit cards for basic needs, only to end up deep in debt and short on hope. No, we want them to do well, to give their full potential to the world, and be the best version of themselves.
Reasons You Should Teach Your Kids Personal Finance
They Are Not Too Young
By the time kids are 3years old, they already know that it takes money to get things. So, you see how early they start, why don’t you build on that awareness to give your child the best financial skills possible.
“The sooner parents start taking advantage of everyday teachable money moments (for example, give a six-year-old $2 and let her choose which fruit to buy), the better off our kids will be. Parents are the number one influence on their children’s financial behaviors, so it’s up to us to raise a generation of mindful consumers, investors, savers, and givers,”
This was the report from the researchers at the University of Cambridge, commissioned by the United Kingdom’s Money Advice Service which further revealed that kids’ money habits are formed by age 7.
Schools Are Not Teaching Them
Sad, but only a handful of schools just hopped on the financial literacy programs for kids, which is solely concerned about kids personal finance. And because of that you can’t sit around and fold your arms, you need to do something. These kids are your responsibility as a parent and as such you have to equip them with what will help their finances in the future, so teach them. Schools won’t teach them everything.
They Learn Faster From Their Parents
Family is the first and most important influence on a child. So, if you teach them as a parent or guardian, they tend to learn faster especially if you are frugal in spending and savvy in matters concerning money.
They’ll learn from how you budget and make plans for shopping. Start by giving them weekly allowances and teach them how to compare prices and make the right choices when it comes to spending.
So They Can Succeed
How do you define success?
As for me, success means living a purposeful life and still being able to affect others positively.
No parent would want their children to fail in life, rather they would want them to succeed and become High flyers. That is why they need to know everything about money. Because, this is the only way they can succeed and live life purposefully.
To Prepare Them For The Challenges Of Adulthood
Aside from investments, one of the lessons parents should teach their kids is how to earn money. Most children think money grows on trees or appear by some magical means when needed. We need to stop this way of thinking, by bringing them to the reality of money and how it works. To do this you have to let them know that money is invested or earned, money is not lying around just to be picked up by anybody. This will change how they see money and communicate to them the value that money has. Once they learn this mindset, they’ll begin to handle issues concerning money better and grow to be financially successful people.
So They Won’t Go Through What You Did
One of the reasons why you should teach your kids personal finance is so that they don’t get to make the same financial mistakes you have made in the past.
It might interest you to know that some parents still struggle with saving for their children’s college funds, investments for retirement, or even buying homes or any form of property for themselves. And this is a result of their student loan debts which they had to offset even after college, expensive lifestyles they lived when they were younger, things they could have avoided if they knew about personal finance and planning.
Is this the kind of life you want for your kids? Certainly not.
To Teach Them Values
Teaching kids about kids personal finance will also help them learn other values. Values like patience, good decision making, and spending responsibly.
So before now, kids would buy whatever they wanted, they felt it was their right to get whatever they like or spend money once they have it. But once you start teaching them how to reduce on that and save up more money for future use you’ll notice that they’ll carry that same patience into other aspects of their lives.
I remember while growing up, my mum would force me to save money. It was seen as force because, whenever we had friends and family visit our home and give me money, she’ll tell me to put it in my piggy bank. I used to be so frustrated about it because I loved chocolates and would spend my money on them every day but mum would always ask me questions. This was how our dialogue would go;
Mum: Do you want chocolates
Mum: when last did you have some
Mum: what would happen to you if you don’t have it
Me: (speechless and near tears)
But you see, fast track to my life right now, I don’t spend money without asking myself those same questions my mum used to ask me. I learned to save money at an early age and now when money gets into my account, I don’t get that usual itch or urge that most people have when it comes to spending money instantly.
So They Can Be Healthy Consumers
With the increasing number of all the amazing products on sale these days, if kids are not taught about kids personal finance, they’ll end up spending their money on things they don’t even need and might end up poor and frustrated adults.
It’s alarming the length people will go just to get things they don’t need so that they can be perceived by others as being trendy.
Just yesterday I saw an alluring advertisement on the television for a $35 lipstick and the message behind it was “this will make you beautiful”. But, we all know that I don’t need lipstick to be beautiful. Besides, some other brands sell the same product and quality way cheaper.
This is just one of the many examples. We have these advertisement companies coming up with different ways and messages that’ll trick us into buying some of these things we don’t need. Some even come with claims to sell happiness through their products.
Now, how do you think your child will survive with such an advertisement? If you don’t teach them how to manage their finances. Kids need to learn how to spot a great deal bargain and avoid spending on impulse. Teach them the difference between wants and needs.
It all balls down to this. It is a known fact that parents are responsible for the needs of their children. Those needs include their feeding, school fees, health care, clothing, and many other needs that have no definite name tag. All this is done to give the child a good foundation and upbringing that’ll make them responsible people. At this stage, they are dependent on you.
But, these kids will grow, go to college, get jobs to seek out their interests, and eventually have their own families. This gradual growth, into the various stages of life is dependent on their financial status and preparation for the responsibilities that come with it.
Your kids will grow to a point where it will no longer be acceptable by society for them to still be dependent on you. So, at that stage, it is all the training they got from you and lessons learned from the years of living under your love and guidance, that will see them through. Therefore, if you never taught them about savings, budgeting, the difference between wants and needs, healthy consumption, investments, and how to bargain. How then will they ever be independent?
So They Can Live The Life They Want And Pursue Their Dreams
There is nothing as fulfilling as living life on your terms, doing the things you want, and pursuing your interest in any field. And these can only be done when you have money to invest in this kind of lifestyle.
Many people today cannot pursue their dreams because they are living from paycheck to paycheck, struggling to feed and provide their necessities. This is what happens when people don’t learn how to manage their finances.
Not all parents have inheritance or trust funds to give their kids, but the one thing they can all do is to ensure that they groom their children into smart, responsible, and financially savvy adults. The way to do this, is by fortifying them with kids personal finance knowledge.
This article is not just dedicated to the next generation, it’s for you and me too.
Please, kindly share your thoughts below, about the reasons you should teach your kids personal finance.