If you think that your children don’t need to think about finance, you’re actually mistaken. In fact, when they’re young is the best time to make sure that they really get what they need to know about finance from the beginning. If you give them plenty of education from the start, they’ll have all the tools they need to really build a solid financial foundation.
Yet when it comes time to really teach your children, you might be unsure of where to begin. It’s not like you have to immediately know where to start automatically. You need to sit back and think about the goals that you have in your own life. Saving, growing your money, and making more money are all things that are important to you. When your children become adults, these are things that are going to be important to them as well.
There are essentially three things that you need to talk about with your children.
First and foremost, you will need to make sure that you sit down and explain to them why finance is so important. You will want to let them know that money isn’t really the root of all evil. It’s a tool like any other. You can use money to do good things, and you can use money to do bad things. It’s just a matter of where your goals lie.
From here, you will need to teach your children the value of saving money. Saving money is a great way to build wealth, because you’re putting money aside for a time where you might not have money. This is actually what ends up dragging people down to a place where they don’t want to be. They end up having to borrow money from friends, which strains relationships. They have to end up taking out advances at work, which means that people at work know their financial situation. If too many people know that you’re hurting for money, they can push you into things that you wouldn’t normally do. You will need to make sure that you step above that type of nonsense and embrace things that are going to provide security. Your children need to understand the value of saving money from a young age. If you can encourage your children to save a little money consistently from the time that they’re young, they will have a lot of money to work with as they get older. When you have money to spare, you definitely have a lot more options than someone that isn’t thinking about the bottom line.
Opening a savings account for your child is very easy, and as time passes, it’ll be even easier to put money in the account. You can get them started and then let them know that they will need to put their allowance and birthday money aside — to a percentage that till lets them save without having to give up everything.
You still want to make sure that your children understand that it’s not a crime to spend money. Sometimes parents get so worked up with the fact that they have children that like to have things that they accidentally teach their children that money is something that needs to be hoarded at all costs. This can cause children to grow up later thinking that spending money is wrong, so they don’t take steps to buy things that can help them make money.
Speaking of making money, you will want to encourage them to think strategically about the future. While some dispute this point, the truth is that now isn’t the time to merely do what you love. The money won’t just follow. You need to have a stronger plan than just following your passion — unless your passion happens to be say, engineering, which is one of the most highly paid and sought after positions after college. It just doesn’t make sense to go into debt just to fund a liberal arts degree, or a philosophy degree. Right now, the hard sciences and medicine are paying well, and you should encourage your child to think about majoring in something that can lead to a well paid career. They can always take up what they really like to do in their spare time and enjoy it, knowing that their future is well taken care of.
A lot of parents avoid talking about these things because they feel that there’s no way that they can get away with it — there’s just too much out there to talk about. No one is saying that you have to talk about everything at once with your children. After all, you’ll have about eighteen years total to have your child at home. Throughout that time there is plenty of room for them to be a child and still get the lessons they need to become an adult that will be able to build a great financial life.
Ready to get started? Even if you don’t feel one hundred percent ready, it’s still a good time to jump in and at least get started — your child will definitely thank you later!