10 Things to Teach Your ChildrenEnsuring your child understands both the value of money, and the proper techniques for managing it, is one of the most important roles you fulfill as a parent. Unfortunately, the challenge of managing your family's finances can leave little time to talk to your child about money or the financial values that are important to you.
One way to advance your child's financial education is to use day-to-day activities as learning opportunities. For example, if you're sitting down to pay bills, either by check or online, take the opportunity to talk to your child about budgeting and why it's important to avoid late fees. Other activities may present chances to discuss other important topics.
Here are some of the things to teach your children to ensure they're on the path to a brighter financial future:
- Set up a savings regimen: Setting aside even a small amount of money on a regular basis provides security and a way to cope with unexpected expenses.
- Put your money to work: Compounding interest leads to faster savings growth.
- Create a budget: Mapping out expenses ensures that money for important purchases will be there when needed.
- Pay bills on time: Building a solid credit history and a reputation for responsible behavior is important, especially when it's time to buy a car or a house.
- Use credit wisely: Sometimes it's necessary to borrow, especially for larger purchases, but only borrow what is necessary for essential items.
- Resist impulse purchases: Avoid wasteful spending by thinking through purchases and not giving in to whims.
- Comparison shop: One way to avoid impulse purchases is to take the time to research whether the same item can be found at a lower price elsewhere.
- Be aware of additional fees and charges: The price tag doesn't always reflect the final cost of an item, especially if there are finance charges or late fees involved.
- Invest prudently: Investing is a great way to meet long-term goals. If done carefully, your children can learn the concept of compound interest, a key benefit of investing.
- Give back: Donating to worthy charities helps people in need and leads to positive changes in the world.