Probably this will be a very short post, in continuation of the earlier article Teach your Kid about money through garage sale, this is about kids and importance of their knowledge about money as well. This is about, why it is farsightedness to grant them access to banking privileges at an early stage.
Personal finance is obviously very important for all of us, and it seems to be one of the most important factors that contribute to a person’s success. That’s why getting your kids started on it early is so important as, if they are responsible when it comes to money, they will find themselves in a much better situation when they enter the workforce, and start making money.
You can achieve this by getting them their own bank account – this will allow them to begin saving for the future and allow them to see where it all goes. Credit Cards aren’t available to children, yet you can get them a debit card, which is just as exciting. Importantly this will teach them the ins and outs of banking, just make sure that it is a joint account so you can stay in control.
It is also important to give your child a defined allowance – this is great for budget setting as they will have to live within their means just like everyone else. This kind of experience will stand them in good stead when they move out and need to budget well to buy essential items, not just toys.
Even, there is no harm getting them a job – this is not new wisdom, yet it is truly important to show your child that money doesn’t just appear, and that it needs to be earned. This will imbue in them a sense of responsibility that will hopefully carry over in the future.
You can give very simple jobs to them, mowing lawn, attending your business as sales boy or girl, waiting at your restaurant, do remember to pay them at market rate, let them earn their money.
We live under the grim spectre of an economic future clouded by unemployment and high prices – this is bad news for any parent and it forces many to scrimp and save in order to provide for their kids.
While this is admirable, yet don’t forget to teach them good personal finance lessons when you could in whatever way possible, these skills are truly invaluable to cope with any kind of economic future.
Half-Assed Economist says
Getting kids set up with the right tools is important, but I also think it is important to work closely with them as they use those tools so they learn about the thought process for maximizing thier money.
I am constantly walking my kids through the analysis of how can I get what I want for less?
Like much in life, I believe that learning to think about money is about 10 times more valuable than learning to do.
What you described is same as the proverb, ‘instead of giving fish, teach fishing’. Exactly I ditto your sentiment. Teaching kids about money is perhaps the most important favor parents can do to their children