Numerous studies have been done regarding how people acquire money values and skills. Surprisingly, parents play a significant role in helping their children acquire good money skills. Well, this isn’t a new thing because if you remember during your childhood years, you will realize that your current money skills have been influenced significantly by how your parents managed their expenses and revenues.
It goes without a saying that children have a good capacity to learn and keep information for a long time. Therefore, your children are at the most important age to absorb and embrace better money skills that you can help them enhance as they grow up. Here are the 3 most important money principles your child must learn.
This is easier said than done. In most cases, parents find it difficult to say “no” to their children just because they don’t want them to have a feeling that they are left out. The most tricky part is explaining to a child why they can’t have everything they desire.
Note that making spending choices makes it easier for you to have adequate cash to finance other things you might be interested in. If you don’t train your children that money doesn’t grow on trees and they need to make wise spending choices, they might end up being unable to differentiate between making wise spending decisions and living within their means.
Allowing your children to understand the benefits and limitations of decisions instead of telling them what to do puts them in charge of what they chose even if you already know that they did the wrong thing. It also makes them confident about their own financial decisions. And of course, remember to correct the child if you know he or she made the wrong choice.
Each financial decision is associated with particular consequences. Your child will learn various lessons when they begin facing the consequences of their financial decisions and understand how it feels to regret a decision you made. Though as a parent you have the urge to fix your son’s or daughter’s financial mistakes, we strongly advise that you let the child feel the consequences of poor financial choices.
Have you realized that in Canada, the level of indebtedness is alarming? Most young people never understand the impact of being highly indebted until they get overwhelmed. During such cases, they find debt settlement too difficult and even some people opt for debt consolidation Toronto.
Help your children understand when not to use their credit cards and the importance of maintaining a good credit rating. These are very important aspects of managing money. Let them understand that making frequent purchases and sometimes huge purchases using a credit card is easy, but every coin spent earns interest rate and all that amount must be paid.
As a parent, you will have a significant impact on how your children manage their money and the money skills they acquire. Note that it’s never too late to learn money stuff, and regardless of the age of your children, you can still teach them the right thing.