10 Things to Teach Your Children about Money

Money

“If you wish to get rich, save what you get. A fool can earn money, but it takes a wise man to save and dispose of it to his own advantage.”― 

Brigham Young

Money is not everything but you can’t live without money. Talk to your child about money as soon as possible so that he can start young to manage money wisely. Here are the10 points to teach children about money.

1. Time is money: Promote the savings habit when your child is young. Show your child the wonder of compound interest when you start saving early. As an example, just save 100 dollars at 10% interest and keep it for 50 years and your money will grow into $11775.91 without doing anything on your part.

$100/=	Compound Interest @ 10%
YEAR	PRINCIPLE	INTEREST	BALANCE
1	100.00	10.00	110.00
2	110.00	11.00	121.00
3	121.00	12.10	133.10
5	146.44	14.64	161.08
10	235.91	23.59	259.50
20	611.58	61.16	672.74
30	1589.21	158.92	1748.13
40	4125.23	412.52	4537.75
50	10705.38	1070.53	11775.91

2. Live within your means: Set examples for your children. Do purchases for your child according to his needs. Don’t follow other parents what they buy for their children. The financial resources of each and every family are different

3. Happiness is not about the possession of material things: Instill in your child’s mind that happiness is not necessarily wearing branded shirts or having a PS3. Happiness can be achieved by having a good time with your child. Your presence with your chills brings much more happiness than your presents

4. Avoid wastage - Cultivate the good habit in your child to conserve energy by turning off the lights or air-conditioning when not in use. Do not allow the tap to keep running. Lead the way at home for your child to follow to prevent wastefulness.

5. Use the pocket money wisely: Pocket money should be given at the beginning of each month. This will allow your child to budget for savings and spending for the whole month. If your child needs a big-ticket item he should keep aside and accumulate an amount every month until the desired amount is obtained for the item.

6. Set limit for the purchase of each item: Specific an upper limit for the purchase of each item especially clothing and shoes. Look for comfort and durability and not brand

7. No impulse buying: Make it a habit that shopping is done according to the shopping list only Allow you, child, to learn about self-control

8. Gifts on special occasions only: The best time to send a gift is when your child has done well in his year-end examination. It is a recognition of his effort and achievement

9. Limited resources: Your child needs to know the financial resources of every family is limited. There is a budget to follow every month so that the limited money can cover monthly expenses as well as savings for rainy days.

10. Borrowing: A very important lesson for your child to learn is that borrowing money to buy things you want is a bad decision. Borrowing means incurring interest and paying more for an item. The best thing to do is to save enough to buy in cash.

When your child is able to apply what he has learnt about money, he will be able to accumulate wealth.