Catch them Young
Teaching our kids how to manage their finances
Ever wondered why some people get so good at managing money at such a young age? Most are them are fortunate to be taught the value of money and how it works.
Managing money is an adult life thing for sure but you’d be doing your children a great service and placing them at an advantage.
Children learn fast and what is learned during childhood usually sticks. Do them the favor expose them to how money works. Let them try managing their own money from the get-go.
- Let them have a saving jar or piggy bank: This helps create a culture of saving. Let them know they can spend it as they wish but won’t be able to get what they want without saving first.
- Teach them opportunity cost: You’ve had more than one situation that your child wants to buy two things at the same time and without enough budget for the two. Let them understand that going for one means forsaking the other.
- Let them understand the concept of compounding interest: While compounding happens in a lot of different aspects of our lives, numbers are concrete examples of how compounding works. How an action otherwise considered as inconsequential can make or break one's financial standing.
- Explain Credit and Credit score: Your children should know the meaning and responsibility that comes with a credit card. They should understand the penalties and why one credit card is better for them than the other. They should also know the effects of having a good or bad credit score.
- Teach them about giving: Charities and helping the less fortunate makes us humane and remember that there are others who lack.
All these and more should be taught to kids at appropriate ages as they begin to mature. It is more important that we should portray these qualities ourselves because children learn more by observing that through direct instructions.