It is essential to start your children with a financial perspective – at a time when debt seems to be a way of life for many. I wonder if today’s parents have learned their lesson to keep checking their finances. Their lives could have been different. Here are some important lessons that you have to teach your children about money.
Saving Is Important
That in itself can be a reason, educating them to save for things other than what they want. For example, if they regularly receive pocket money, or if they currently work independently and earn some money, teach them to open an account so that they can have their own Kinderkonto Vergleich. This will come in handy when they have a family of their own.
Money Doesn’t Grow on Trees
Children do not know that there is an endless supply of cash. When they see something, they want to buy it. They often hear, “Put it on the credit card.” For those who see you cover your purchases, they don’t know what you have to cover for them. Describe to them how they can buy what you need to cover with cash.
Say “No” to Unnecessary Things
One of the most valuable lessons a child can learn is the voluntary decision to say “no” to shopping, even if they need it. One of the incentives is that something is available if you save money and wait patiently. Don’t offer them cash every time they need it, because it teaches them that there is a source when there is not.
Let your children know that there is a difference in product standards. There’s more than one store that sells things, and there might be a better deal. Show them by waiting a little longer and looking around so they can get some money.
Knowledge on Credit Cards
The bank and credit cards are the same, but without the obligation to carry the money. Your children will see you hand out another piece of newspaper or a record. But they never see that it’s money.
Show them that you have to pay for both of them and that you don’t have to buy what you can afford – apart from a few big purchases – because the bills will come! And you will be the one who will suffer the consequences if you do not talk to them about the importance of handling finances.
Establish a Budget
Once your child receives a reasonable amount of money, you will want to show them how to plan how to use the money. Help him/her understand how to set aside money for savings, money for purchases that require savings.