Teaching kids about money is a controversial thing — no one argues that you should teach them, but the how is a tougher question. I recently got a mail from one reader & that really disturbed me. Go through the below mail & realise the importance of teaching kids about money……
Whether right or wrong my sons had education from good school/colleges where majority were effluent and strikingly rich where as we belong to middle or lower middle class. My husband stretched himself, rather went out of the way taking debts for their education with a belief that it is a good investment. Yes my elder one is from xyz (Indian top engineering institute) and younger son is in 3rd year abc(well know engineering institute from south). As my husband expected, one of the sons did get a better job than many of his cousins/friends. But what about his education loan and his spending habits?
The sad part I observed is, their peers/friends are from rich clan and for them many luxuries are necessities to maintain their “class”. My sons being in their company/friendship/continuing them as friends, also got almost similar attitude and are unable to adjust to our “class”. As a result their expenditure is more than our “class” . My elder son who earns nearly 38,000 spends more than 20,000; whereas my nephew who earns just 30,000 spends only 10 to 12 thousands and able to save more.
I am not able to make my sons understand that how much one saves is more important than how much one earns.”
Definitely there are solutions to this situation but still prevention is always better than cure. Go ahead & prepare your kids for wild financial world.
Four Guiding Principles:
- Educate yourself. You can’t teach something you don’t know about yourself. Learn as much as possible about budgeting, about saving, about investing, about cutting expenses, about reducing debt. Armed with knowledge, you’ll be a good teacher.
- Set a good example yourself. It’s one thing to tell your kids something, but if you are doing the complete opposite, they’ll learn more from your actions than your words. To teach them about controlling spending, you have to do so yourself. Lead by example.
- Teach them one habit at a time. Your kids are not going to become skilled financial planners overnight, or in one month, or even in a year. Your goal should be to teach them these lessons over the course of their childhood and adolescence. So teach one thing at a time, until they’ve learned the skill, and then move on to the next. There’s no rush.
- Let them learn by doing. You can’t teach by telling. You have to tell (briefly), then show, then let them do. Let them make mistakes. And then talk about those mistakes. Soon enough, they’ll learn why those mistakes were actually mistakes, and if you set it up right, they’ll learn better habits on their own, by doing.
So with those principles to guide you, here are 10 valuable lessons you can teach your kids about money.
This article is from ZenHabits (uncopyrighted) one of the top blogs in world. This is run by Leo Babauta – he writes on simplicity, health, goals, motivation & inspiration.
Do you feel you got an adequate financial education growing up? Are you making any conscious effort to teach your kids about money?