Three Things to Teach the Younger Generations about Money
To be happy and independent, children need to know a thing or two about money.
What are the most important lessons you can teach your children about money? That is a difficult question because children learn so many teachings from their parents, grandparents, or guardians.
One thing is very true, though: How we act later in life often can be directly correlated with what we learned earlier in our youth.
Too often, however, adults can get themselves in trouble because they do not develop a sense of what to do or even what not to do when it comes to financial matters.
Here are a handful of things we believe are important to teach the young ones you love.
1. The value of money
We probably all heard the line “Money doesn’t grow on trees” repeatedly when we grew up. But Kids need to learn so much more about the value of a dollar.
For starters, the basics of supply and demand and even the recent implications of inflation.
While the conversation doesn’t have to be complicated, it is important to address.
2. Living within a budget
One of the most detrimental financial decisions even wealthy people can make is not living within your means. Overspending often leads to stress and anxiety. In addition, it can ruin credit ratings and lead to high-interest rates on money owed and a mountain of debt.
So, before children get themselves in trouble later in life, talk to them about spending when they are in elementary school.
Or, before ultimately moving out on their own, let kids know what happens when they spend too much on credit cards.
Show them how the debt builds up and interest compounds. Then, explain what a credit score is and how those scores can impact them later in life when they want to buy a car or a house.
3. Spending does not bring happiness that lasts.
There is a short-term happiness people receive when buying the things they want.
Most times, that happiness fades. Help children understand that just like overeating cake can lead to bad things, buying too many products (and services) can also lead to financial unhappiness.
Of course, there are many lessons we should continue bringing to the younger generation. But, we hope these tips serve as a gentle reminder of how much you can positively influence your children so they may be happier later in life.
Original Article: Kiplinger
Content in this material is for general information only is not intended to be a substitute for individualized financial advice. Please consult your legal advisor regarding your specific situation.