It is never too early to start teaching your children about money. In fact, one of the best things you can do in order to ensure that your children become financially- responsible adults is to start teaching them about money at a young age. Below is a list of important money lessons you can teach your kids:
Money Is Not A Infinite Source (Ages 3-5)
Your children need to understand that money does not grow on trees. One way that you can teach your children that money is not an infinite source is by taking them to the bank. Allow your children to see the money coming out of the ATM. You should also tell your children that you had to work for your money. Additionally, you should tell your children that a bank is a safe place to keep the money.
It Is Important To Set A Budget (Ages 6 to 10)
Setting a budget is one of the keys to keeping finances in order. You may want to consider giving your children an allowance when they do something good, such as doing well in the classroom or helping out around the house. If your children spend all of their money on one thing and do not have enough money to purchase something else they really want, then they will realize that it is important to not spend all of their money in one place.
Savings And Interests (11 to 13)
You should talk to your children about both short-term and long-term savings. You should also explain to them how interest can affect their savings. Furthermore, you should explain to your children that the earlier they start saving money, the better.
You should also teach your children about how they can save money by cutting unnecessary expenses. For example, your child wants to save up for a new iPod. You can tell them that if they do not buy a snack every day, then they will have more money to put towards the new iPod.
Delayed Gratification (All Ages)
We live in a society where people feel like if they want something, then they have to purchase it right now. That is why many people are drowning in credit card debt. You should teach your children that they cannot purchase everything that they want. You should also teach them that waiting for things they want will pay of in the future.
David Milberg is an experienced investor from NYC.