In this world full of competition it is important that we teach our kids to be independent and smart in all aspects of dealings. As a parent, we are the one who has to make a sincere effort to teach our kids about financial terminologies and thereby raising up financially responsible kids.
One of the key ways to reverse the trend with adults is to upper limb young people with the tools to make smart financial decisions. Investigation shows that lack of familiarity with personal financial matters can damage youth well into the future.
Here below are few tips for bringing up financially responsible kids:
- Lead by example: You are a resemblance and a role model for your kids. It is you whom your kids look up to. If you lead an example for your kids and teach them the importance of finance, it will impact a lot to make your kids financially smart and erudite.
- Teach saving, giving and spending wisely: From the small age it is important that children learn the essential needs of savings and expenses. Any time your child earns money by doing errands or receives a cash gift; encourage him to divide the cash equally among the petty cash boxes to keep it for future use. This will definitely improve your kids’ intellect to save and store.
- Take your kids to the bank: Many banks allow you to open a savings account with low minimum deposits. Take your kid to the nearby bank and explain him/her about the functionality and workings of banks. Opening a savings account for your child also will teach him/her that money can earn interest, and those earnings, in turn, generate more interest.
- Let them make mistakes: Do you give your kid an allowance to spend as pocket money. Well, let’s try once and give them a small amount of money and let them spend it as per their decisions. If they make the wrong choice and spend it without any valid requirements, they'll experience the negative outcomes of their mistake and will learn to make smarter financial decisions in the future.
Well, above are the few tips that will surely help you to teach your kid about being financially smart.