It is a parent’s obligation to raise a kid who will grow up to be a productive and well-rounded adult. This does not stop at bringing food to the table, teaching the manners and taking them to the physician when sick. You have to take them to school where they will learn how to live with others in addition to the academics.
Unfortunately, schools do not teach financial literacy despite financial management skills being one of the most important skills one needs to be successful. As such you must take it upon yourself to teach them about money; how to earn it and manage it.
Teaching your kids about money requires much more than giving them a piggy bank or opening a savings account for them.
You can follow all the parenting tips given at parent guide, but you will still have to teach your kids the importance of delayed gratification early in life since it is one of the single most important determinants of success.
Your kids need to learn that they will now always get what they want, when they want it and how they want it. The aphorism ‘good things come to those who wait’ come to mind.
Teach your kids how to save in order to get what they want. For instance, if you are giving them an allowance of say, $30, teach them the importance of saving a portion of that money so they can buy that $100 gadget they want.
Make them see the goal they are working towards achieving; and not just saving for the sake of it. If you teach your kids the significance of saving in order to afford something, they are more likely to oblige that simply telling them to set some money aside for an amorphous goal.
Inform them that you’ll no longer buy them certain items and they have to save and work themselves to buy the items.
Earning money and saving shouldn’t be made to look like a punishment. Motivate your kids to earn money and save by providing incentives like matching their savings and offering them tasks which they can complete to earn money.
This way they’ll learn the value of hard work and see the benefits of developing a saving culture when you motivate them and provide incentives.
Discipline goes hand in hand with delayed gratification as an important money lesson.
Chances are your kids see you as a role model and imitate your ways and mannerisms. If you are disciplined in your spending, your kids will learn the same from you. That’s not to say that they will automatically pick it from you; you must teach them.
For example, if you go to the store and you had planned to purchase a certain item, stick to that budget even if they see something more impressive that they want you to buy for them. Impulsive buying is a form of financial indiscipline and over time leads to poor financial decisions and choices.