3 ways to ensure your kids inherit long-lasting financial values
Parents may find it difficult to discuss navigating fiscal health and wealth management with their children. There are some easy ways to get kids involved with money so they understand how to value and manage this resource. Instilling the values of saving, investing, charitable activities, and planning for short-term and long-term goals can make a world of difference in a child’s life.
Follow the leader
Kids learn to copy what their parents do, not what parents say. In order to make a lasting impression on a child regarding money, get them involved in daily money moves. Kids should be taken with parents to meet with financial advisors, learn about portfolio management, and the goals of investing
Parents should show kids the value of delaying a frivolous purchase, and emphasize putting money toward important bills, savings, and investing first. Whenever possible, responsible credit card use should be excised, coupled with timely bill payments. Parents who take their children to work can explain how their time and efforts result in monetary compensation, which is used to cover living expenses.
Feed the pig early
It can seem an overwhelming task, saving a large sum of money over a period of years, especially with a small income. Kids who learn the value of saving early, socking away birthday money, unexpected windfalls, or a portion of their allowance will come out ahead in life.
If saving is made out to be a routine exercise, or kids look forward to making milestone savings goals, it makes the process a lot less painful. Parents should instill the idea of being more excited to save money than spend it and reward kids who can stay committed to building their finances.
Family budget matters
Too many parents fail to expose their children to the family budget early. Not seeing how much income is allocated for housing, food, utilities, clothes, and entertainment on a monthly basis may result in kids with unrealistic ideas about money. this is a huge disservice to their kids, as it is highly unlikely they will develop financial literacy any other way.
Involving children with the process of making and sticking to a family budget encourage accountability, record keeping, and evaluating decision making with money. When a child wants a parent to make changes to the budget, they can see how much of an impact their choices have on available income and outcome.