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Three Important Money Lessons for Children

2015-11-20 07:45:20

Financial literacy begins at home and as early as childhood. Although educational institutions include this in their curriculum, it is imperative for parents to teach their kids about money. Giving them life hacks about money can save you and kids a few bucks.


We can hear a lot of money lessons, but some of those are inaccurate. We can learn about personal finance, taxes, investing, and the like. However, many parents fail to impart the importance of making decisions when it comes to money, which goes beyond the set of rules a person can read everywhere.


This article has compiled the three most important money lessons for children.


Lesson 1: Money is Stored Work



If kids perceive money as a stored work, they will go a long way, especially on decisions about saving and spending. You may ask questions that can depict the relationship between cost and value, such as “Do I need to work over the weekend to buy an expensive toy?” If kids won’t understand the significance of value, most likely they won’t be able to make a wise choice and want to have everything because kids think they have money.


Going back to the question above, is it worth every penny? If a parent decides to use their stored work to buy that toy, then that is not worth the expense. What he or she can do is to ask the kids do some chores or extra task to pay for it.


In case you have a hard time inculcating this concept, just remember that the barter system is unwieldy in nature. And by telling them the connection about two important factors, you somewhat teach them about work.


Lesson 2: Money is Time Like Gold



It is difficult to earn money, right? Teach your children the same thing. How we wish we have plenty of money so we could stop working. But that is not the case. We need to work to earn money, and it takes time to grow your money.


Most adults know what to do if they have or have no money. It can be as simple as choosing between cutting the grass outside your house all by yourself and asking somebody else to do it for you. Or, it can be as complicated as deciding whether to purchase a home or rent an apartment.


But when it comes to setting the frame money of children, this can be totally different. However, this can be done. Talk to your child and ask their preference. Make sure they understand the implications of their decisions. Let them know money can free them from doing things they do not want to do, as well as spend more time doing the things they want. How? Instill the significance of needs and wants. That is two entirely different things.



Lesson 3: Make the Money Work for You



Money should do the work for you, not the other way around. Unfortunately, many young professionals work for money. Many individuals often scatter their money into several jobs, including putting it in a savings account or investing in the stock market. Your money, your call. Tell it what to do.


Children, when they see you have enough money working for you, can notice you need not to work. For adults, it is called retirement. But for most of the kids, they think you are cool. Be careful with your financial decisions though.