Money plays a prominent role in the day-to-day lives of most people. Having the ability to properly manage one's money can make it easier to retain a good credit rating and expand one's savings account over time. Teaching your children about financial planning can seem like a daunting task, but it's an important one.
Here are three lessons about money that you need to ensure your children learn before growing into adulthood.
1. Delayed gratification when making large purchases.
In a world where credit card debt is on the rise, it's important that your child learns about delayed gratification when it comes to making large purchases. Having the ability to learn the value of saving money to buy something they really want will help your children avoid amassing large quantities of credit card debt as they mature into adulthood.
You can teach your children about delayed gratification by providing them with an allowance and helping them save up to purchase a toy they desire.
2. Saving for the future.
It's impossible to predict each and every expense that your child will face as an adult. In order to ensure that your child is prepared to cover any unexpected costs that he or she may face as an adult, you need to teach your child the importance of saving for the future.
Creating a savings account for your child and having him or her place a percentage of their allowance into the account each time they are paid will help to establish good savings habits at an early age.
3. Stretching a dollar as far as possible.
Maximizing the value of a dollar is a skill that should be learned in childhood. Your child needs to recognize the importance of making his or her money last for as long as possible. Teaching your child not to make impulse purchases using his or her allowance money can be beneficial in helping him or her learn to conserve money.
It can also be beneficial to help your child recognize the importance of comparing brands in order to identify the product with the best quality-to-price ratio in order to reinforce the importance of stretching a dollar as far as possible.
Teaching your children about money is important when it comes to helping him or her establish a healthy relationship with money for the future. Give your child the skills necessary to build personal wealth as an adult by teaching him or her about delayed gratification, the importance of saving money, and strategies to help stretch a dollar.