Start Them Early: Tips on How to Teach Your Kids about Personal Finance

  When it comes to personal finance, a lot of people see it as something that concerns only the adults. After all, it’s the grown-ups in every home that bring in the money.   This does not mean, however, that your kids should be kept in the dark when it comes to managing money. If anything, this is the perfect time for you to start training them, right when they’re still living under your roof and are still obliged to follow your rules.   The moment you decide to start training them on how to handle finances more effectively, you also prepare them for the real world and equip them with the know-how needed to survive once they’re living on their own.   Here are a few important lessons you have to teach your child as early as now:  
  • Save before you spend.

The funny thing is, even adults fail to do this. This is why a lot of families suffer from having a lack of resources when the rainy days come no matter how big their regular earnings are. It’s because they spend first before they save.


This is one thing that every parent must teach their children. If you give them 100 pesos a day, that doesn’t mean that they can buy a 100-peso value meal each day because they can afford it. If they do this, they save nothing, and they can shell out nothing when a friend suddenly invites them to the mall.


If they leave 20 pesos before they leave the house however, they have 80 pesos left in their pocket. And yes, there are 50-peso meals on every McDonald’s menu if they really insist on eating there everyday.


Here’s the biggest catch. If they keep this up, they’ll have 100 pesos saved up by the end of the week, 400 pesos at the end of the month, and so on.


This is one lesson that they can take with them until they get old, and they will learn how to pattern their spending based on what’s left after they save. If you allow them to spend before they save, chances are, there’ll be nothing left to put aside.

  • Live within your means.

Debt is one thing that people have to live with. However, falling into the trap of borrowing money each time you don’t have enough is eventually going to force you into bankruptcy. And yes, this is one lesson that you should teach your kids as early as now.


If they see you swiping your card at every turn and buying everything you see on a whim, chances are, they would grow up thinking that money is easy to get. With the way you’re spending it, who would think otherwise?


This example, however, tells your kids that it’s okay to have debt. It’s okay to buy stuff even if they can’t afford it. They can always pay it later anyway.


And so, instead of teaching them how to be financially responsible, you may end up leading them to a life of personal loans and debt traps.


Help your kids avoid this life by changing a few of your own spending habits.

  • Grab money-making opportunities.

You can teach your kids all about entrepreneurship as early as now. They don’t need to have a degree for that, all they need is the right set of skills and the will to make it happen.


If your child shows great talent in art for example, have them display their work somewhere and offer them for a price. The moment your child starts earning money doing something that they enjoy, you have taught them that work does not have to be a burden all the time. It also shows that money is not something that only adults can do.


Just make sure that you’ll be there to explain the intricacies of business with them all the time. They would eventually get bored and decide that they don’t want to draw anymore. When this happens, help them explore other money-making options.


Be there when nobody seems to want to pay for what they have to offer as well. Help them look at it from a different perspective, maybe they’re just missing out on a few details that could change the situation.

  Opportunities are all around, even for the younger generations. Remember that the moment your child becomes an adult and moves out of your home, the way their lives will progress from there will all be up to the things they learned. Make sure you equip them with the right kind of financial knowledge that would set them up for life.   Special thanks to Hobbies on a Budget for the main image.

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