Did your parents teach you about money when you were growing up? Did they emphasize the value of having good credit and how to live within your means? Did they teach you how to buy groceries, put money aside for emergencies, and pay yourself first? What are some ways that you can pass this knowledge on to your own kids?
Here are 10 ways to teach kids about money.
1. Bring your kids to the bank and the ATM when you deposit and with draw money. Get them familiar with how the banking system works.
2. Explain to them that the money they earn is usually electronically deposited into their bank account and that it is important to pay themselves first, ten percent of the amount deposited. This ten percent is then automatically put into some sort of savings account. The rest of the money is reserved for living expenses.
3. Talk to them about paying rent or a mortgage, spending money on food, fuel for the car, car expenses, TV expenses, electricity, heating etc. Explain the importance of turning off lights when they leave a room.
4. Teach them to delay instant gratification by saving for the item they want. They will appreciate and value it more when they acquire it.
5. Teach them what it means by depreciation. Explain that when a new car is driven off of a lot that it instantly loses value. Would it not be more prudent to purchase an older car for them to use as their first car. Explain what it means by getting value for their dollar.
6. Teach them how to cook from scratch. Not only will they eat better but they will save a lot of money by not eating in restaurants.
7. Teach them how to properly use credit cards. If they have a balance on a credit card they must pay off the credit card in full each month. They may opt to purchase credit cards that they put a limited amount of money on it instead of carrying cash in their pockets.
8. Teach them to only purchase items they want on sale. Regularly bring them to thrift shops to buy items that they need. Have them celebrate whenever they acquire something 50-75% off the regular price.
9. Teach them about the magic about compound interest! This one tip may make them millionaires by the time they retire!
10. Teach them to take courses on how to invest of their money. As they get older have them find a mentor that has achieved what they want to achieve financially and have them do what he or she did. Remember, one of the most important skills they can learn is how to handle their own money.