This is a contributed post and do not necessarily reflect the opinions of Meet The Harris Family.
There are lots of things that our kids inherit from us, including our looks, characteristics and part of our personality. Unfortunately, though, a good sense of money and financial know-how aren’t passed on at birth. These are something that we all need to learn and experience firsthand. So, there is no wonder that so many parents are keen to pass on as much as they know about money to their kids. Passing on all of this knowledge is a great way to help them understand about money and finances, which is valuable for later in their lives.
So, are you wondering how you should teach them? Here are some really useful pointers.
Teach About Opportunity Cost
You need to teach your kids about opportunity cost as soon as they are able to understand the concept. The concept is a pretty easy one to grasp actually – it’s just the fact that once you make a choice and go with it, you will have lost all of the other options that were available to you. For instance, if you decide to buy a chocolate bar then you might not be able to also buy a lollipop because you won’t have enough cash left. As you can see, this is a very important concept in money!
Give Them Some Responsibility
Teaching them the theory of money is perfectly fine and is something that you absolutely will need to do. But this theory is no good on its own without putting it into practice. And practice is the best way to get used to money and handling it. So, you might want to start giving your kids an allowance to do whatever they want with. They will soon learn that they will benefit far more if they are careful with all their cash rather than simply splurging it.
Let Them Listen To Family Financial Planning
It’s also a good idea to be open with your kids about your family’s financial planning as soon as they are at an age to understand everything. So, if you are taking a look at some credit repair companies reviews online or a potential new financial product, you might want to involve your kids. You should explain why you are researching it and what you are looking out for that will help inform your decision.
Explain The Importance Of Budgets
Without budgeting, there is no way we would be able to successfully look after and manage our money. You will find it incredibly difficult to track all of your incomings and outgoings, and eventually, you might not really know what is happening with all your cash. It’s important, therefore, to ensure your kids know all about budgets and how to set one up for themselves. You might even want to encourage them to create a budget for their allowance so that they get to understand the basics of budgeting from a very early age.
Once you impart all of this wisdom onto your children, you will find that they grow up to become financially adept!
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