Teaching Your Children About The Value Of Money
There are several of ways you can teach your children to form healthy habits like the value of money.
As we know most kids learn about money and making change in school, but probably won't learn how to manage money unless they choose finance as a career path. It's up to the parents to see that their children reach adulthood prepared to face life's fiscal challenges. Nowadays, money was important in our lifes. We need to teach our childrens about the value of the money. We need it when we want a better life for our children in future, let say for studies, vacation, marriage, home and others. Maybe we can plan it for our children life from now on.
Earlier is better to teach our children about money. It could develop strong saving habits, learn how to make smart purchases, begin to understand the true meaning of "investment", and perhaps they can learn why they can't immediately get everything they want. In the long term you can avoid them accumulating debt. The most important thing here, we can teach them the value of saving for future, also can help them plan for financial security.
As you think about how, what, and when to teach your children, just put it in your mind that it's never too late to start teaching-even adults also can be taught the basics of personal finance.
An ideal time to begin teaching is when they first begin to notice it. In their mind, money comes from mom and dad's pockets. Explain to your children that money is earned by working, and that you can only spend what you earn. To help them understand what it's like to get paid on schedule, begin paying an allowance. Then help them se goals for how they spend and save their allowance. It's important, however, to make sure that you stick to the payment schedule; otherwise the lesson maybe lost.
This chart shows the growth, compounded at 8 % monthly, of an investment of $100 per month begginning at age 4 and ending at age 60. Assuming the investment remains untouched until age 60. This example is hypothetical and does not represent the performance of any actual investment.
Allowances teach children valueable lessons about working and earning. You might consider paying your children for chores outside of daily duties, such as helping to garden or wash the family car.
Everytime you walk by a toy store you always hear: " I want....Buy me this....!" Again, pause and take a moment before responding. This is great oppurtunity to teach another important lesson about personal finance: saving and interest. Explain that people often save their money for items they want to buy.
A simple savings lesson invloves using shoe box or an empty jar. Make it fun by having your children decorate their "bank", while explaining to them how you also use real bank for saving. As they save money, you might reward them with a small additional amount. this will encourage them to save a portion of their allowance for a special goal.
To further encourage the learning process, you might consider plotting a visual chart of their savings (include their goal) so they can easily see their savings grow.
Once your children have been saving enough to accumulate $50, take them to the bank to open their first savings account.
Teaching your children about our complex financial system may seem daunting, but you can help them in the right track by encouraging smart habits now.
