--------------------------------------------------------------------
Money Management Skills to teach your kids
Far too many kids graduate from High School and move out without learning the skills of how to make and manage money. Unfortunately, kids are not taught these skills in school. Therefore, it is up to you as parents to teach them money skills. Teaching kids how to make and manage money teaches them responsibility.
Teach your kids how to make money-
Leaning how to make money is a vital life skill to teach your kids. Teaching them how to get a job or helping them start their own business is important skills for them to learn while still at home. By helping your kids make their own money, they will be much better off later in life. Many successful entrepreneurs like Tony Hsieh, CEO of Zappos, started to make money through small businesses as kid. He used those skills to start small businesses in college. Later on in life, he created multiple million-dollar businesses. Needless to say, he has never struggled to provide for himself. For more information on helping your kids make money check out www.howtomakemoneyasakid.com.
6 ways to teach your kids how to budget-
1. Put their money in categories
Your kids need to understand that all the money they earn should be divided into categories. Every dollar should have a name on it. Some categories could be: savings for education, charity, cell phone bill, gas, saving for a car, insurance, etc. Using categories to organize their money will help them understand that when the money is gone in one of the categories, they either need to cut back in that category or earn more money. By doing this, they will learn to spend less than they make.
Leaning how to set aside money to save up for large purchases is a great skill that sadly many adults still haven’t learned. If your son or daughter later on needs a new car or wants to buy a home, they will have the discipline to save up. The natural tendency for kids is to spend whatever money they have and then ask mom and dad for more money.
3. Pay bills on time
Kids need to learn how to pay their bills on time. Teaching them how to avoid late fees will allow them to have more money later on. An extra $50 for late rent, or interest fees can really add up. If these habits aren’t fixed before leaving home, they learn what a collections agency is the hard way. With their bad credit, they will come back to you to bail them out.
4. Dealing with credit cards
If you follow Dave Ramsey, host of a national radio program on finances, you will follow his counsel on no credit cards. Credit card companies know that if they can get a kid to spend irresponsibly while they are young, they will be in over their heads for the rest of their lives. Help them to understand how to simply throw the constant credit card mail away. The skill of avoiding credit cards can be compared to teaching your kids to say no to drugs. Say no to credit cards.
If you believe credit cards are a good thing, then teach them how to use them responsibly. Teach them to not max the cards out and paying them back to $0 before the end of each month to avoid interest.
5. Emergency fund and investments
The power to save money for emergency funds, investing or retirement is very important. The younger you start teaching this; the better off they will be later in life.
6. Charity
They need to learn to donate to charity. I have read a lot of finance books and the common thread through every book is that giving to charity will help you receive more in return and be better off. There have been studies on the returns of donating to charity and it holds true. Those who give to charity will be wealthier then if they keep all their money to themselves.
Make sure your kids are learning these skills before they leave home. That way they can live financially independent and be much happier through life.
No comments:
Post a Comment