Nowadays, knowing the ins and outs of your personal cash flow and savings are must-have skills given the circumstances, and just having that bit extra locked up as an emergency fund could prove to be your saving grace when you need it most. In fact, it’s the families who’ve managed to secure and maintain a foothold on their finances that were capable of withstanding the initial brunt of the global pandemic and the succeeding waves of economic turbulence beset by Covid-19.
And with all those reasons considered, we think that there’s no better chance for parents to introduce their kids to the world of personal finance than today’s global situation, seeing how even a tad bit of awareness and financial knowledge could go a long way. So, to help lay the foundation, we’ll be going over the many benefits of teaching them early and just how you can go about educating them in the most effective way possible.
Don’t Keep Them In The Dark About Money Matters.
Although it might seem like you’re burdening them with the stress that they shouldn’t be thinking about at their age, keeping them in the dark about your family’s money matters is actually doing more bad than good. Of course, we don’t expect you to go on and educate a toddler still learning their ABCs, but if you’ve got a kid who’s in their teens, then it’s only fitting that they at least grasp the overall situation. In fact, you might be surprised at how innovative and understanding a young mind can be at soaking up all this newfound knowledge.
#1 Start Financial Responsibility At A Young Age
While your children won’t probably turn into a hedge fund manager overnight, getting them to start financial responsibility at a young age gives them more time to think about the importance of money and further reinforces that actions will always result in timely consequences. In doing so, they will soon understand why you can’t go the extra mile for buying new stuff, why that one road trip had to be canceled, or the reasons for cutting back on certain purchases. And while it most certainly will take some time to adjust, they’ll thank you for it in the future.
#2 Understand The Family’s Current Financial Situation
Apart from the long-term growth prospect, choosing to educate your kids about personal finance will give them an overview of how the family’s current financial situation has been disrupted due to the effects of the global pandemic. In fact, they might actually feel happier knowing that you trust them and have faith in them to understand how things have changed, giving them newfound confidence in the process. Sure, it will be a long time before they can help around with the family’s finances, but grasping the financial situation of it all will at the very least stop any complaining and move towards cohesion and cooperation.
#3 Spark The Fire For Entrepreneurship
Lastly, while financial responsibility and awareness are two very beneficial factors, one wildcard that might just happen is sparking the fire for entrepreneurship because they learned about the world of personal finance so early. You’d be surprised at how willing your children are when it comes to helping around, and they might just be capable of doing so if their entrepreneurial spirit is given a chance to grow. And although they won’t be taking Jeff Bezos’ spot anytime soon, they are sure to achieve greater things down the line.
Of Course, Don’t Force It On Them.
Likewise, when you do approach your kids and teach them about personal finance, don’t just dump all the technical jargon on them and expect they can wrap their brains around every little thing you’re trying to say. You don’t want to force this knowledge on them because it is quite a lot to handle, so take your time and don’t rush things.
- Make Them Feel Capable Of Helping: One excellent way of going about things is making them feel capable of helping. Show them that by simply holding back on their wants and turning off appliances when not in use, they’re already saving so much money in the process. Plus, you could also help them set up their own personal savings account, so they can start building their capital ASAP.
- Don’t Paint Too Much Doom & Gloom: Something you definitely want to avoid is painting everything in too much doom and gloom, and while the world is most definitely in dire straits, you don’t want to end up scaring your kids away from personal finance. Teach them in a way that’s realistic and covers all bases, but do it in a way that’s hopeful and reassuring as opposed to pessimistic.
A Bright Financial Future For The Family
Overall, teaching your kids early about personal finance can help pave the way for a bright financial future, and the money you save extra might even score you a good enough downpayment for a killer house and land deal. So, think twice before you keep them in the dark about money matters because you might just be overlooking a bright entrepreneurial future waiting for them.