Drugs, sex, and money are the three most difficult things for parents to talk to kids about. But these are very important things. Parents have to set aside their lack of knowledge or embarrassments, and start conversations with their kids.
Following are some steps that will help you start teaching money concepts to your kids:
Even though you are not a good money manager and you don’t save money for emergencies, or pay your monthly bills on time, you have to start introducing money concepts to your kids today! It will help your kids avoid certain mistakes that you made as well as help you too.
Think About Your Habits
Think about how you started managing your money. It may be possible that you had a very little to no education in the classroom about managing money. Perhaps you learned your money management skills from your parents. If you think about it, then you can teach your kids in a better way by setting an example for them.
Talk about it
Talking about money matters with your kids will help them improve their money skills. Talking about loans, bills, and other financial activities with them will definitely give them the idea of what roles money can play in our lives. It is also helpful to talk about your mistakes in these matters as well.
The Uses of Money
It is very important that you teach your kids the four main uses of money: saving, spending, investing, and giving. It will help your kids learn other aspects of money, for example, charity and planning for the future.
Kids learn faster through visual aids, so you might need to make a system which will help them understand where all their money is being spent. Introducing your kids to savings account is also recommended, particularly when they get older. Observing how their money builds and earns money for them via savings account is valuable.
Your kids will probably make a lot of mistakes in the beginning. Therefore, you should watch what lessons they learn from their mistakes. It will also help you learn with them. Learning about stock market at this point is highly recommended. There are a lot of computer games and board games available along with a lots of books as well to learn more about investing and saving.
Generally, money is used to fulfill goals, whether it’s a vacation, a house, or for your child, a game or bike. Teach your kids to set short term goals as well as long term goals so they can learn to efficiently invest their money or save it. A short term goal may be saving for concert tickets or a game. A long term goal could be college or some other type of higher education.