Whether you like it or not most of what you teach your children is caught more than taught. Your actions are what they watch more than your words. Do you want your kids to have the same financial habits you currently have? Here are a few ideas on good habits to pass on to the next generation:
1.) Acts of generosity. It's important that we do not communicate that money is all for our own pleasure and use, but rather we need to help people who are less fortunate than us. We have all heard of kids who have chosen to take their Birthday money and donate it to a cause that is important to them - this is a very good habit.
2.) Earning money. Whether it's setting up a lemonade stand or delivering flyers, learning to earn your own money from a young age is a good habit. It teaches children to be industrious and creative. It also teaches saving and budgeting. When kids learn that they can buy more expensive wants buy working for it, they learn to prioritize their wants and save up for the bigger purchases. We did this with our son when he was fourteen and wanted an X-Box. We didn't want to buy it so he saved and saved his birthday and Christmas money, and money he made from mowing lawns until he had enough to buy it himself. This taught him the value of money and that he could have the bigger things he wanted, he just had to go without lower priority wants to get them. The same is true in adulthood.
3.) Respect for money. The order in which we organize our money in our wallets signifies the level of respect we have for money. Scattering money all over the house and car shows that we do not have a healthy sense of value and respect for money. We work hard for our money therefore it has great value and deserves a significant degree of respect.
4.) Having a piggy bank. I love piggy banks and always have. Piggy banks teach discipline, patience and perseverance. On top of that, saving money just feels good no matter what your age!
5.) Making financial choices. If kids are given everything they want, they will grow up feeling a sense of entitlement, which will not serve them well in the real world. A better strategy is to help them make decisions between two choices from an early age. Delayed gratification is a very crucial element in becoming successful with money.
The better-prepared children are for adulthood the less likely they will have to keep returning to the bank of mom and dad.
Retirement Income, Investment, & Tax Planning,
Willis and Nancy
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