Most parents dread the thought of teaching their kids about money unless they reach 15 years of age. Even if they try to talk to them about money before they reach their teenage, it isn’t too effective. They prefer sticking to the surface-level or basic topics like saving and budgeting that could hamper the knowledge of the kid in the long run. According to National Center for Educational Statistics, an exam was conducted to measure students all over the world in science, mathematics and financial literacy and around 23% of 15 year olds couldn’t score the passing grade.
What are the things that the parents are not getting right while imparting financial education to their kids? What are the most effective ways in which moms can teach their kids the best money lessons in life? Here are few that you should know of.
#1: Evaluate the value of money
Visuals can always be an effective learning tool and there are few personal finance experts who suggest that young children should use a glass jar instead of a piggy bank as they can see the money that they collect and get a feel of the feat that they’ve done by saving. Once they know the value of money, they will know how tough it is to spend all of it in something that is not worth it. As he might not be acquainted with a bank account, the initial days of restoring his belief in the value of money has to be done in this way.
#2: Emphasise on the necessity of curbing impulsive buys
What does your child do on receiving an allowance? Does he spend it on toys, candies or books? If he prefers such impulsive purchases, it’s time for you to instruct him on how he should prevent himself from splurging on unnecessary items. Even after instructing him, if he continues the same, ask him to store the receipts so that he can later on review what he spent his money on.
#3: Motivate your teenagers to get jobs and make money
Are you a parent of a teenager? If answered yes, you should suggest him or her to find a job – whether mowing lawns or baby-sitting. In case your teen is an older one, you may help him find a job at a retail shop or a restaurant. It is only when he starts earning his own money that he will start appreciating money. He will also get an idea of how his parents fund the lifestyle of his family.
#4: Teach him to use a credit card in a proper manner
Credit cards, when used correctly, can be a useful tool for building credit foundation. On the contrary, if your kid misuses his credit cards, this can lead to financial headaches in the years to come. Discuss with him the pros and cons of using credit cards even though you think he is still not ready to use him. It is better to make him aware beforehand. Therefore, if you are a parent of a growing teen who is all set to leave high school and enter college, make sure you give him the best advice on handling money so that he grows up to be a financially responsible individual.
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