One reason that teaching kids about money can be difficult is because most often the parents have not been very successful in managing their own finances too successfully. Sadly, this very important topic has not been taught to children at schools either. Children need to be taught how to handle finances, saving and investment at their level. Thankfully, there are simple ways that lessons can be taught to the children and hopefully the parents can adopt some of these strategies as well.
The first thing children need to learn is the difference between wants and needs. Failing to do this will only serve to complicate life later on. The results of failing to understand this simple distinction can lead to the accruing of debt at a later stage in life.
Many people are struggling financially due to the fact that they desire instant gratification. Debt is incurred to buy wants instead of saving to buy the things he or she wants. In past years people would save up to buy things they wanted today they are impatient and want it right away.
Children should be taught that just because the item can be afforded does not mean it should be bought. Being able to make the monthly payments does not qualify people to buy things. Overspending should be avoided and some cash should be set aside each month.
Discipline is the main lesson children will learn by being taught to save each month. This is an art that many people have not been able to master and this has been filtered down the line to children. Many people spend money first and then try to save. This strategy is incorrect and people should save first and then spend.
Many wealthy people have developed the habit of giving to those who are less fortunate than they are. Wealthy people will attribute their good fortune to the fact that they have been generous. When teaching kids about money, this lesson should be taught to them so that they can contribute towards making the world a better place.
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