5 WAYS TO MAKE YOUR KIDS FINANCIALLY RESPONSIBLE

“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?
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