Do you want to see your kids become multi-millionaires when they grow up?
Yes? Read on!
So, what are the smart ways to teach your kids about money?
By the end of this post, you’ll know how best to raise money-savvy kids!
One of the greatest desires of most parents is to nurture our kids into financially savvy adults with money skills that will see them power through life.
Because we love our kids, every logical thought tells us that when they supersede us, we’d have succeeded brilliantly in our duty as responsible parents.
If we ourselves are already highly successful in our finances, we’d want our kids to follow in our footsteps and accomplish more than we could ever imagine.
Or, if we’ve made mistakes, then we wouldn’t want them to repeat our mistakes.
This is why it’s crucial to teach our children money basics at an early age. You may like to read how this shrewd mother started her children on a frugal lifestyle in #18.
Don’t be misled into thinking that your kids are too young to start. It’s very important to introduce them to age-appropriate activities that teach them about money, so that they will have an excellent financial start.
Set a Good Example – Be Money Wise
Yes parents, YOU are the main source of financial education for your children.
You’re the hidden financial curriculum.
How your children see money is through your eyes.
Every day, your behavior towards money is absorbed by your kids. They’re always watching and learning from your behavior, whether or not you or they are aware of it.
How you feel towards money shows in your actions.
How do you treat money? Do you spend your money before you earn it?
If so, it’ll be hard to teach your kids about saving and the importance of saving money.
Or do you save almost every dollar that you earn? Then it’s also hard to teach kids that money is a tool. Your kids will likely see accumulating money as an end in itself, not as what it can do for them and others.
Don’t make this mistake like I did.
Thanks to my example, my child sees money as an end goal in itself.
He’s reluctant to spend money even on necessities like food!
Unless it’s something very close to his heart, like a toy that was discounted at more than half price, or a phone that is worth four times its cost, he can’t bear to part with his precious dollars.
I’ve been working hard to remedy this situation. I make sure I show him that I’m willing to buy food, rather than go hungry just to save money.
It took time, and it wasn’t easy to reprogram his attitude towards money. But luckily, he’s realizing that it’s far wiser to stay healthy by buying good, healthy food.
After all, what is the use of having money but not good health?
So, you need to set a positive money example for your kids.
Help Kids Fight the Influences of Advertising and Peer Pressure
With our kids spending so much time online, it’s normal that they face an increasing barrage of adverts day and night.
The latest toys, the newest online games . . .
These adverts are designed to irresistibly appeal to kids’ desires. The tentacles of advertisers extend nearly everywhere 🙁
Even adults with heavy financial responsibilities like paying the mortgage and bills need nerves of steel to control their wants when they see the latest and best stuff being promoted. Not to mention youngsters with no financial commitments.
What about their peers?
Those whose parents keep buying them the latest costly gadgets and fancy consumer goods. These peers then “advertise” what they have, simply by using and wearing their latest stuff.
How are your kids influenced when see their peers’ awesome brand-named possessions?
What can we do? We don’t want to ‘spoil’ our children by pandering to their every ‘want’.
The answer lies in this shrewd strategy:
There was a teen who wanted a costly pair of sports shoes – a Nike Air.
The price? $160.
However, his money-savvy parent would pay for only ordinary shoes – Avia trainers – a real bargain at only $40.
Since the youngster wanted the Nike Air, he had to foot the difference (pun intended) – a princely sum of $120.
The teen, faced with having to cough up $120 of his OWN money, suddenly gained some wisdom and made do with the free Avia shoes (Surprise!!)
Now, even if the teen had willingly footed the $120 to upgrade to the Nike Air, he likely would have learnt a valuable money lesson, as the $120 would have reduced his own savings.
He’d also look after his shoes well and even clean it, since 3/4 of his own money would be in it!
Would you use this money education strategy? Why or why not?
Another solution might be to discuss the cost and value of stuff with your kids.
Say that if a more ordinary item works well, then what’s the point of paying more for a brand? After all, he’s basically paying extra cold cash just to be seen as cool. Ask him if it’s really worth it.
When my son was younger, he said he wanted a new BMW when he’s a grown-up. He was obviously influenced by the automobile’s classy image.
However, Mr MMT (MoreMoneyTips) gave him repeated dire warnings of how such a car would drain my son’s wallet.
They do cost a lot of money to buy, maintain and fix.
Have you heard some folks say that BMW stands for ‘Break My Wallet’? This applies to other pricey prestige cars too – they’re also Break My Wallet cars.
I hope you’ve found useful takeaways based on our experience in teaching our child about money. They’re certainly not light issues and you’ll need to be prepared to change your money education as your kids mature. Use these strategies that have been proven to work and your kids will benefit immensely from your wise guidance.
Please share this if you find it helpful. And as always, I appreciate your comments.