Teaching Kids About Money – In my childhood, I have heard a quote much time that, “Padoge Likhoge Tho Banoge Nawab, Kheloge Kudoge Tho Banoge Kharaab.” The meaning behind this quote is that if you do studies you get a job & you become successful. But if you go for a play, roaming outside you remain unsuccessful and cannot do anything in your life. But what happening in real life is different. The person who is reading, studying, and getting a job cannot do anything else more in their life. But the person who is playing is becoming a successful person.
According to me, this above-said quote has ruined millions of children’s life because kids just focused on getting good grades. I am always in favor to Educate your kids, but I am against those parents who force their kids into a rat race. Due to this, kids or even parents never focus on teachings kids about money. There are a few money concepts in their books. But even teachers do not teach this concept properly to their students. That happens because teachers even also do not know, and they also grew by keeping that quote in their mind whole life.
Teachings kids about money is a very important concept. If parents want their kids to stay ahead of others, they should help by teaching kids about money. This concept of teaching kids about money give your kids an extra edge over finances and making them financially educated.
I have read a quote somewhere that, “it is better to cry in Rolls Royce rather than on streets alone.”
I grew up be seeing my classmates’ study academic books continuously for 8 hours and keep their studies on tuitions to get good grades only. Now, when I see them how they are struggling financially after getting high grades in School/Colleges.
The question arises in my mind, “Why this happens with them?”
The answer is because they do not know the actual concept of money from their childhood. They still do the same thing which their parents or grandparents do.
We should avoid that and start teaching kids about money, so they do not struggle financially in their life.
Teach About Savings
Teach your kids about savings and teach them the concept of the power of compounding. Generally, kids study the compound interest in mathematics subject but never apply this concept in their life. This concept helps kids to understand the theoretical concept with practical knowledge. The sooner they start saving, the faster their money will grow.
Good Spending Habits
Teachings kids about money help them to develop their minds towards spending habits. What to but, what to save, or what to share will make them goal-oriented that helps them in life. That also helps them to build their budget. If you give some amount to your kids for a birthday party, they will try to manage everything that money only. That helps them to understand how to prepare budgets. (Read Budgeting Rule).
Develop Financial Awareness
By teachings, kids about money help them to understand the assets and liabilities. This concept clears them what to buy or what not to buy. Early they understand, the difference between assets and liabilities, sooner they able to concentrate on things which will be able to grow and help them in the future. Further, it will clear their mind that what are things that put money in their pocket in long run. (Read Long Term Investment)
Generally, kids are easily attracted to or influenced by new toys, new gadgets. Remind them that once their money is gone, it is gone. That will help them to build to the habit of delay gratification. Instant gratification can cause a loss of money. And we know if you give money to kid it will finish in no time. So, delaying gratification helps them to think twice that this item or product is required or not. And if they think it is necessary, then they will save first from their pocket money and then buy at right time.
Teachings kids about money always help them and understand how money works. Once they understood then, nobody can stop them from achieving success in their life and achieve financial independence. Financial freedom is what everybody wants. With financial awareness, know what money is and what they can do, which leads them in the right direction on a successful path.
Teachings kids about money seem to be a tough task, but it not impossible. However, saving money is one of the most important aspects of building wealth and having a secure financial foundation.
“The most important job in the world is for parents and teachers to keep the light on, to guide a lost child out of the darkness and let him find his own unique path to success.” – Robert Kiyosaki