“The best thing you can give to your child is, financial knowledge” – Robert
Kiyosaki
Teaching our kids about saving money is the greatest
gift that we can give as parents. However, the lessons should be more than
that; because the financial knowledge opens up the gates to their freedom and
independence. Here are a few methods to
raise financially responsible children.
1. Teach the value of money:
Depending on their age start
teaching the value of money, how it will be useful for their living. In the
journey of raising them, do not miss an opportunity to teach the value of
money. For example today almost every teenager is using a credit card. But they
don’t know how the interest multiplied. When they come to college, the credit
amount becomes lump sum. When you give a credit card, teach them how the
payable amount multiplies. So that they can know how money works.
2. Give
financial knowledge:
Giving financial knowledge is not transferring adult
stress to them. It is giving an outline of your budgets like your expenses,
savings, and interest rate. It helps to learn about money and in the long run, they
find interest in financial operations. Robert Kiyosaki, the author of the
bestselling book, “The Rich Dad and Poor Dad”, is more specific of giving
children the knowledge of finance. He says that he learned money importance
from his Rich Dad, which bought him success today. He learnt how money works
for rich, and how other people work for money.
3. Involve
them in budgeting:
Having an open talk with your kid about how you save,
how you pay bills on credit cards. Rich dad of Robert Kiyosaki explained the
cash flow of liabilities and assets. He explained with the help of blocks
diagrams and arrow marks instead of massive charts and accounts. At the age of
10, Robert understood the cash flow. Children understanding ability is more
when you speak in their language.
4. Let
them experience:
Provide some real money to manage your
expenses. For example, take them to grocery shopping and ask them to handle the
holiday shopping, let them spend the money. Provide them with your support but
let them make choices. Patrick Payne, a professor at Carolina University says
that the kids must understand there will be compromises involved. Kids must
understand how much we (adults) give up forgetting something else. And there is
a cost for everything.
5. Encourage:
As a parent, you need to give
encouragement and support while nurturing the child. Even though when they fail
in some of their financial actions, encourage and guide them the right way.
Teach them to the power of tracking their money. Encourage to pay their bills
at the learning age. Educate them to “earn while you learn”. This method not
only encourages them to manage their earnings but also handle new challenges.
The best presentation for a child on their birthday is “Piggybank”. Teach them
the importance of savings; encourage them to get interested in financial
matters. No matter what you teach the kids, they remember what you DO! So
respect the money first by yourself and show that to your kids. Robert Kiyosaki
says “Right from the small age my rich dad encouraged me to involve in money
doing. That made me realise why money is important.”
Do
you think it is important to induce financial responsibility? How will you
raise kids financially strong?For more interesting reads sign me up!!
