One of the most important early tips that you can give your children is to do with being smart about money. After all, it looks like the economy isn’t going to be improving anytime soon – given who looks like they will be running the world, too, it’s not likely to stabilize. So, we should be looking at ways to make sure that our children are raised with a clear and obvious awareness of the dangers of not using money in the right way.
If you fear for your children and think that they might not be too clever when it comes to cash, try and pass on the following lessons.
Start Saving Early
Teaching your children that saving away around 10% of their annual earnings is going to very useful is a good thing. What I done was offer to my children to start gradually saving away 10% of all of their money for them as the years go by. It means that when they finally get access to it at 18, they should have a nice little amount to play with.
I explained to them that saving from a young age means they will go through life clear and considered about how to best use money. When I explained how badly money can be used, they quickly agreed!
Teaching to Need
Another great way to keep your children frugal with their money is to teach them to need rather than want. Money should be prioritized to cover all of our needs first, then followed by our wants. It’s a useful little trick and one that, over time, will make it much easier for your kids to start grasping fiscal control.
Taking the time to show your children the importance of looking after their coins is a very important feature. It helps them to see that spending on needs before wants is going to make a huge difference later.
I taught my children that any buys that they make should be done with the right intentions. Now, they understand the power and the importance of patience. They can now take their time to appreciate the lesson that is being taught to them whilst also appreciating that they have their own views on this subject.
However, I’ve already noticed that they don’t make impulse decisions. The minute they get money for a birthday, say, they are happy to wait 2-3 weeks to get the item on sale.
It’s easy to convince your children to see the power of money, and to realize that waiting can usually reveal big savings. That’s three times now I’ve stopped my son buying a toy with his birthday money on the day. Instead, he waited just one week and got the toy cheaper.
Then, he had enough to get another toy on top. By simply showing practical examples, in context they understand, even the youngest of children’s can get the importance of avoiding making impulse buys and instead saving and spending with intelligence.