One of the foremost obligations of parents is to educate their kids about money. Since finance is not taught in schools and is not a part of any educational curriculum, the responsibility falls on the parents. Ultimately, family and household remain the only institution to teach the kids about money.
Nonetheless, the parents do not necessarily have to “teach” their kids about the functionality of money. Rather, kids passively learn from the day-to-day talks, parents’ habits of spending, and overall attitude toward money. According to Harvard research, the majority of the habits of children are developed from the subconscious learning from their parents. And dealing with money – earning, saving, and spending – are no exception.
Given the inevitability of parents as a crucial institution, here are 4 crucial money lessons every parent should teach their kids:
Earn Money As Early As Possible
The first crucial lesson you can teach your kid is to make them understand how inevitable it is to earn at an early age. This doesn’t mean you are forcing them to work even if they are underage. Rather, you are giving them genuine advice to earn money by themselves. Earning money at an early age has two benefits:
- Your kids will understand how hard it is to earn money. As a result, they will be very careful in spending that money.
- The children will appreciate how hard you work for them. In turn, they will be obedient to you and will likely follow other advice that you give them.
2. Saving Equates With A Dignified Life
Another lesson every parent must teach their kids is that saving means a dignified life. Meaning, if you have enough savings, you will spend a dignified life. Your life will not meet any catastrophic risks and emergencies.
A gallop survey on LinkedIn reveals that 62% of older American live on a typical paycheck to paycheck cycle. They panic about car repairs and even medical bills. To avoid any such uncertainty it is on the shoulders of parents to make them prepared. Instill in them the necessity of savings and your kids will live a dignified life.
3. How You Spend Money is More Important Than How Much You Earn
Once you teach your kids about earnings and savings, it is for the most crucial part: Spending money. More often than not, people spend extravagantly on things that don’t need. Ultimately, they fell victim to bankruptcy and debt. Extravagant spending could be as simple as buying a shirt that you need – or a pair of shoes – not to mention dream houses and lavish cars.
So, teach your kids that how you spend your money is way more important than how much you make. Let them understand that every single penny in their wallet counts and they need to be cautious of that.
4. ‘The Bank of Dad’ Won’t be There Forever
Make your kids feel that you will not be there to provide for them forever. Life is uncertain and one day you may not be there to support your kids. Before that happens, prepare your kids.