Why Raising Money Smart Children is a Must

In the current challenging times brought about by global economic crisis, it is now even more important to be open with your children about your finances.  Allowing them to learn money management skills can help you in reducing your household bills. Bearing in mind how prices of consumer goods keep increasing, you will need all the help you can get from members of your family, no matter how young they are. So, why not begin with your precious young ones by teaching them good money management habits! Want to know why this is one of the best things you can do for your children and ultimately for yourself and your family? Read on, and you will find out.

Build a solid foundation in life

Let’s face it – managing your finances is a necessary life skill, particularly in this day and age where virtually everything requires money. Unfortunately, when it comes to kids and money, most parents neglect to teach their children about the basics of money management. This is something parents need to work on because just as you teach your children other good habits, such as brushing their teeth and cleaning up after themselves, you can also teach them good money management habits. What is most important is teaching your children the value of saving money and not spending their savings on an impulse. This is the starting block that will help them establish solid money management habits that will benefit you and your children.

Money doesn’t grow on trees

Or does it? Why else do banks have branches?! – This would typically be a child’s sentiment and a disturbing one it is. Kids these days really do believe that money is easy to come by. Picture this –  your kid asks you to withdraw more money from an ATM  machine when you tell him “No, I can’t buy you that new toy because I don’t have much money left”. Want to know why he can so casually suggest that to you? It’s because he thinks there is an endless flow of cash coming from the ATM machine. That is your more sophisticated version rebutting the ever famous “Money doesn’t grow on trees” excuse commonly used by moms and dads worldwide.

Kids naturally go through those stages where they just want this, want that, want more  and forget that money has to be earned and prioritised – if people could have whatever they wanted, the world may (or may not) be a better place to live. Once your child hits this stage in their life, you will know it is time to teach them some money management skills.

Instill discipline and save your wallet!

One of the best lifelong lessons that your child can gain from learning money management skills is the art of discipline and we all know how much kids need that! Kids these days are different and many may be shaking heads right now saying that kids now have a mind of their own, not like kids in yesteryears and instilling discipline is easier said than done. All of us can argue till the cows come home about this, but we need to realize that discipline is a must.

It takes discipline to put aside your hard-earned money - regardless whether from a salary or an allowance – into a savings account or a simple coin box. However, as your children learn the differences between needs and wants, and starts saving their money, the discipline gained will spread to other areas of their lives. And ultimately your wallet! They will learn the importance, and have the discipline, to live within their means and reduce the amount of holes they put in your pocket.

Avoid Generation Debt

If your child is now a young adult who is still studying in university or is in the early years of their career, then they are part of the generation known as Generation Debt. If this doesn’t sound familiar, then it is because your children have not come to an age where they need to start venturing out on their own yet. But as sure as the sun will come up the next morning, your children will get to that stage in their lives eventually. And when they do, there is a great possibility that their financial decisions will create a spillover effect,  that you, the beloved parents, will be left  to deal with.

Most young adults nowadays enter the workforce with five figures of student loans, rack up four figures of stubborn credit card debt, and their savings are miniscule. Add to that the skyrocketing prices of consumer goods and housing and the debt just adds up.

Therefore, to prevent your children from falling into the same trap as their peers, you have to assist your children in learning how to manage their money today!

Become charitable adults

Money management not only involves learning how to save, spend and invest wisely, it also involves learning the art of giving back to society. This is your opportunity to give your child exposure to charitable organisations and people less fortunate than they are, and a great way to educate the next generation about family values and establishing a sense of appreciation and gratitude for the luxuries they enjoy. By encouraging charitable action from a young age, your children will eventually become empathic adults who know that their actions can have a positive impact on their surroundings.

Stay tuned for more!

You can create an exhaustive list of why it is important to teach your children money management skills. However, knowing the five reasons mentioned in this article is sufficient for you to begin that process.

Don’t fret, we will guide you along the way with many more articles on how to get you, your kids and your family excited about money in a positive way. Therefore, come for an exciting journey with us as we guide you to making your children money smart!