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If you want your kids to grow up in a financial volatile world as responsible financial adults, you must begin teaching them about money from an early age. However, there are many adults who may need a little help in order to organise their own thoughts when it comes to finances. Here is a five step program that you can use to easily teach your kids about money.
1) Get Your Kids Started Handling Their Own Money
Many parents already undertake this step through the distribution of an allowance to children, but most parents leave the process at this step and end up with kids who are just waiting for another handout. On top of that, many parents give kids money on top of their allowance if they beg for it hard enough.
The first step in raising kids into adults that are good with money is to solidify exactly how much they will get for an allowance and what they have to do for it. You have to hold firm when it comes to giving your children money in any other capacity.
2) Allow Your Children to Work When They are Old Enough
Invariably, the day will come when your children will ask you for more money than you have given them with an allowance. This is the teachable moment that will lead to step two – telling your kids to do some work.
This is also a step that many people take for their kids, but they leave it here, which tends to raise kids that are more enamored with the short buck for the impulse purchase than they are with the long-term effects of making and budgeting money.
3) Teach Your Kids To Turn Hobbies into Money
In order to keep your kids from becoming wage slaves who only want to work towards that next impulse purchase, you should encourage the efficient use of time and their hobbies in order to make money. Do not let your child or children miss any extracurricular activities to make money. When they ask for more money because the money from their job is not enough, another great teachable moment has arisen. This is the time that you can encourage them to start their own business or create partnerships to make money faster.
4) Show Your Kids How Money Should be Viewed in Life
Different people have different philosophies about money, but one overarching philosophy is that making money should not be the sole purpose of your life. After all, what good is money if you cannot enjoy it?
Set off specific times for your children to make money during the day, and encourage them to start businesses in which they are not attached to a wage, but can make more money if they work at a faster rate or if they think up a more efficient process. Encourage them to create partnerships with like-minded friends that add up to more than the sum of its parts.
5) Show Your Kids How Money Can be Used to Help Others
Again, many people have different viewpoints when it comes to charity. However, you should definitely teach your children the value of giving money away, even if the only reason to do so is to get tax benefit.
This actually leads to another point that is definitely valuable in teaching your kids about money – taxes. As soon as your children start making enough money, you should introduce them to the world of filing their own taxes and keeping up with their receipts for accuracy.
The one thing you should remember from this article is that teaching kids bout the true value of earning, spending, saving and investing money is a process. And it’s one that will take time.