3 Ways To Inspire Your Child To Make Good Financial Decisions Through Life

3 Ways To Inspire Your Child To Make Good Financial Decisions Through Life - kid with money image

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Time spent educating children is time that is never wasted. Unfortunately, despite school teachers and the school faculties best intentions, it’s difficult to fit in every lesson at school that it takes to become a responsible, sensible person in later life . Kids have a lot to deal with, not only growing up and coming to terms with their identity, but also increasing levels of responsibility as the years pass on.

Filling your child’s head with knowledge is fantastic, and will surely help them in later life. But giving them guiding principles to live by through inspiration and demonstration is more valuable than anything you can tell your kids. So how do you kindle this burning fire of curiosity that children seem to so naturally emanate? Here is a list of 6 different methods you can use to not only teach your child or pupils positive life lessons, but to bond with them as well.

  1. Take an interest in them.

Kids are naturally attention hungry, especially from those they rely on. If you water them with this special ingredient of available openness, listen to what they’d like to achieve in life, and stimulate a few ideas based off of what they say, you can really open their mind from an incredibly young age.

For example, let’s say your daughter says she’d like to ride horses and play with ponies all day when she’s older. Perhaps you could suggest she’d like to be a vet, and help all animals who are poorly feel better! Or perhaps she’d like to open a sanctuary for horses and donkeys. Sit back and watch as her eyes widen with excitement. Keep this up and she’ll start believing she can do anything, which, of course is absolutely true.

3 Ways To Inspire Your Child To Make Good Financial Decisions Through Life - image of an excited girl

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  1. Help them envision their future life.

Helping a child envision their future life is something that is immensely beneficial to opening up their horizons. Of course there’s no need to come to concrete answers, and this exercise should be fundamentally fun. However, sometimes it’s great to stimulate their imagination. For example, you could ask what sort of pets they’d like as an adult, what countries they’d like to visit, or you could go to a website like Pink Realty to give them an idea of the house he or she would like to throw family parties in one day.

  1. Show them the benefits of saving money.

Kids are impulsive, and most adults are too. It’s a good idea to show them, through subtle, unintrusive ways, the best way to manage money effectively. You don’t have to sit them down and teach them the finer methods of understanding balance sheets, but perhaps giving them a small allowance to earn (if old enough,) and letting them spend it once a month only will teach them the value of saving in order to acquire higher value items, or replacing items they didn’t think they lost. You can also tell them in a way that will make them proud of you how your savings have helped you pay for unexpected bills etc, and they will slowly (hopefully) start emulating your habits in their teenage and young adult years.

These three combined steps will not only help your child begin good habits in a way that will bring you closer together and give them a slight understanding of how you run your family, but they will desire to emulate you. Kids are impressionable, so make sure to use this to their advantage.

This will hopefully provide the correct attitude that will stop them making big mistakes in adulthood. You can be sure then that you’ve covered at least some of the bases your tough job of parenthood requires you to address.

The ‘Pocket Money for Chores’ Debate

http://thefinancialfairytales.com/blogIt’s an age old parenting question, but one which still causes a huge amount of debate: should you give your child pocket money or allowance for doing chores?

The best answer we can give you is, ‘sometimes’.

One obvious reason for linking the two is to encourage a work ethic. Giving pocket money for chores teaches a simple lesson: if you do the work, you get paid. If not, you don’t. Since children in the UK can only take on part time work at the age of 13 (except for certain ‘performance’ related jobs), pocket money provides a good way to teach this lesson at an early age.

But wait a moment… shouldn’t your children be helping out with the chores around the house anyway? A key part of being a family is working as a team and recognising the hard work of others. Giving money for chores runs the danger of creating a selfish attitude, and you also run the risk of hearing comments such as: ‘So you want me to take my school bag upstairs? What are you going to pay me for that?’ Also consider what happens if a child decides they aren’t bothered about getting pocket money a particular week. Does that mean they can get away with not doing their chores?

You can immediately see the pitfalls with the system. So what is the best way to overcome them?

Each family is likely to have a slightly different approach, but one of the best systems we’ve found is to pay your child a base amount of pocket money, which is unrelated to chores. This basic amount will teach them vital decisions about money and saving – whether they save their money to get something they really want, or whether they spend it straight away for instant (but often fleeting) gratification (that’s another issue entirely)

In the meantime, children should be asked to do basic chores around the house, but can be given the opportunity to earn extra ‘rewards’ by completing chores which are beyond their usual scope. Cleaning the car, for example, is a chore many parents agree they would like to reward their children for taking on. This reward can be monetary, but could also take other forms. One good option we came across is a sticker system. Every time your child goes above and beyond what is expected of them they are allowed to put a sticker on their chart, and once they’ve reached an agreed number, they’re allowed a treat. This could take a variety of forms: maybe a special purchase you both agree on, or possibly a special trip. The advantage of this system is that the rewards are flexible and can be varied depending on the individual child’s preference.

Of course, no matter what pocket money system you use, it is almost inevitable that your children will complain about their chores at some point. But if you talk the system through with them, explain why it’s fair, and, most of all, keep it consistent, you should find that these instances become far less common.

Do you agree? What are your own experiences with pocket money and chores? Share your thoughts below.

THREE SIMPLE KEYS TO EMPOWER YOUR KIDS FINANCIALLY

by Elisabeth Donati, author of The Ultimate Allowance – Founder Creative Wealth Intl., LLC

Creator of Camp Millionaire & Creative Wealth for Women Workshops

You may be thinking to yourself, “Is there something I can do to make sure my kids don’t move home after they move out?” In other words, you want a way to make sure they grow up to be financially self-reliant. I’m here to say, ‘Yes, there are some relatively simple steps you can take to ensure that your kids leave home knowing what to do with that green stuff they will be in charge of making, managing and multiplying in the future.

More young adults are not only leaving college these days because of financial problems (student loan and credit card debt) but they are also moving back home after they graduate because they simply don’t make enough money to go it on their own.

The primary cause is simply that kids don’t have a clue what to do with their money, or anyone else’s for that matter. Most of them are very good at spending money, but it’s a rare 20-something that understands the dangers of credit card abuse or the power of saving and investing. Heck, for that matter, most adults don’t understand these concepts either.

Imagine this scenario…

Your son (or daughter) comes to you one day and says, “Mom, I have decided I really want to grow up and become a major league ball player.” You say, “Wow, that’s cool. Good for you.” And you go back to doing what you were doing. Your child looks at you and asks, “So, would you get me a ball so I can learn how to throw it?” You say, “Maybe later.” He says, “What about a glove and a bat?” You respond, “Nah, I don’t think so.” He’s a frustrated at this point and asks, “OK, but will you at least teach me the rules?” You say, “Oh, you can learn the rules later.” Now he is really angry; he’s fuming inside and feels stuck. Finally he gets really mad and yells, “But MOM, how am I ever going to become a great ball player if I don’t have a ball, bat or glove to practice with and I don’t know the rules?”         

This is what parents do, most unknowingly, to their children everyday in regard to money. We grow them into adults but rarely give them the equipment or rules to practice, and get good at, The Money Game!

Let’s look at three simple steps you can take to empower your children with the tools, knowledge and practice they need to grow up financially free.

FIRST, you must set the best example you can for your child. Since human beings learn best by example, it is critical that you first examine what you’re teaching your children through your actions because they really do speak louder than words. How can you expect your child to save and invest if you don’t? How can you expect your child to grow up with a healthy understanding of money if you don’t have a healthy understanding of money? How can you expect your children not to use credit cards if the only way they see you buy things is with a credit card?

The important thing to remember is that children learn from us three ways: by what they see us do, by what they hear us say and through the experiences they have with money. J know that they are always watching and learning from you in ways you probably aren’t even aware of.

If you’re like many adults who don’t understand money, you’re not alone.  You weren’t taught when you were young either, however, now’s the time to make a commitment to educate yourself. There are books and seminars everywhere. A great place to start is a program called the Millionaire Mind Intensive. For more information, visit http://www.peakpotentials.com/a/tofreedomandbeyond.

If you’re doing well financially, good job. Keep asking yourself how you might ‘show’ your kids about money with your daily routine and include your kid’s friends. Kids often learn better from people other than their parents so look for opportunities to influence all the kids in your circle.

SECONDLY, talk to your kids about money. Take every opportunity you can to open up a line of conversation about family expenses, credit cards, debt, interest, investing, business, real estate, the stock market, financial beliefs, etc. Some examples of when to talk to your kids about money are:

•   When you take money out of the ATM, talk about where the money comes from, why you can only take out so much, etc.

•   When you pay for the groceries with a credit card to get points so the whole family can go on vacation, make sure they understand the importance of paying the bill off EVERY SINGLE MONTH!

•   When you pay bills, let them help you write checks or pay the bills online. Teach them how to check the accuracy of each bill.

•   When you deposit money into your bank, visit your investment advisor or accountant, take your child along.

The worst thing you can do is assume that someone else is teaching your child about money. What children learn from parents who don’t talk about money is that talking about money isn’t OK. A healthier way to look at money is simply as a tool to reach your dreams (a Creative Wealth Principle); it doesn’t mean we’re better or thinner or smarter than others. It’s simply a tool.

THIRDLY, consider giving your child an allowance, but not the kind you may be thinking of. In my book, The Ultimate Allowance, I teach you how to take the money you already spend ON your child and run the money THROUGH them instead. I’ve read that it takes an average of $275,000 to raise a child through age 17. If you run even a portion of that money through your child, imagine the practice he or she is going to get. By making plenty of financial choices—good and bad— they learn the ins and outs of money management before the consequences aren’t so damaging.

In summary, remember that human beings learn best by example. Your children are watching everything you do with your money, listening to everything you say about money and internalizing all the experiences they are having with money, so pay attention to the example you are setting.

And finally, please talk to them about everything financial. It’s the best investment you can make in your child’s financial future and we promise it will ‘pay off’ in the end!

For more information on all of our unique financial literacy products and programs, please visit The Ultimate Allowance and Creative Wealth International or give us a call at 800-928-1932.

Kids allowance – to give or not to give?

Kids Allowances

People seem to ask the same questions about kids allowances again and again.

“Should I give my child an allowance?”

“How much should I give my child as an allowance?”

“When should I start giving my child an allowance?”

“Will an allowance ruin my child’s entrepreneurial spirit?”

Allowances are a very touchy subject and it really comes down to each individual’s personal strategies for financial education for their child.
Teaching children about money can be very difficult and confusing for the parent as well.

Most of us were raised with the value that “money is evil”, or “you don’t need to have money to be happy.”

But have you had a good look around you lately? Can you find me a family who are in a lot of bad debt that are not stressing about their finances? Maybe money doesn’t make you happy but not having money will make you a lot more unhappy, I can tell you that for sure.

Just imagine, you have a recurring income of more than $10,000/month.
How would that feel? Would you feel stressfree because you are now able to pay off all of
your expenses and thereby not create any bad debt?
How will you feel when you have money left over at the end of every month instead of living paycheck to paycheck?

What if you were financially able to give away 10% of your income, every month, without even noticing the fiancial impact?
What would you give it to? Who would you like to help? How would it feel to be able to help others in need with the extra money that you are earning without even feeling the financial impact?
It would be a pretty awesome feeling right?

So how does this tie into the topic of allowances?

Some people suggest that Allowances are a way to teach their children about money.
Others suggest that allowances gives their kids the chance to learn to handle money without losing their shirt.

Here are some of my own suggestions on the topic to get your financial juices flowing.

Maybe when we give our child an allowance it might start to create the feeling of entitlement in our child?

What if by giving our child an allowance we were actually hindering their financially creative minds?

Would they be so used to just getting money that they wouldn’t even bother to come up with creative new ways to earn their own money?

And what about pride of ownership that comes when we are finally able to acquire our dreams by our own means instead of just as a gift from someone else?

These are just a few of the topics discussed in Allowance Secrets and for a limited time you can get it for free.

Allowance Secrets is the ultimate Guide to allowances. Over 20 experts have
contributed to this project.

Like to learn more about the subject? Click here