Parenting has always been an adventure without a manual. During the course of your children’s lives, you will be expected to teach, raise, and develop your children as the future leaders for tomorrow. While personal finance never becomes a priority between teaching them how to ride a bike or preparing them for college applications, instilling a strong money management mentality and skill for your kids can play a large roll in their lives. This deeper understanding of financial literacy can help your kids make better financial decisions during and after college so you do not need to worry about their future.
Let’s start by first understanding the concept of financial literacy. Financial literacy is the ability to use knowledge and skills to make effective and informed money management decisions. This covers things from the concepts of earning, spending, and saving to the ability of opening a bank account. While these are noble financial skills, knowing these everyday money management notions increases a persons overall financial success. In education today, the system focuses much of their attention on reading, writing, and math. While these core skills are imperative in the growth of our youth, financial literacy, especially as secondary classes, can become a game changer in transforming our children into leaders and forerunners for our society.
It is clear that finance, especially personal finance, is an important topic in all of our lives. But with its importance, why do many adults veer away from the topic when it comes to their kids? Wouldn’t they want to share their knowledge to help get their children on the right path for success? As much as we want to say yes, many adults, however, avoid talking about money because of their own financial struggles and lack of confidence of their own personal finances. While it is understandable why they might be embarrassed, they need to know that they can make that much needed impact in changing the course of their kids. First and foremost, they have the experience and perspective needed to aid their kids to a perfect track record. In addition, they can steer them from any mistakes that they have made in the past. This type of knowledge can absolutely go a long way. Even if you do not know the more higher level practices, introducing and sparking interest and awareness can help empower your children to take control of their financial lives.
To help teach your children about money management, start off by showing them the relationship between earning, spending, and saving. This can be done through a simple weekly allowance. This type of approach will allow your child to gain the overall foundation of the value of money. From there one, especially as they get older, teach them more about a savings account, balancing a checkbook, and creating a personal budget. Some approaches many parents have used is to actually show the their own personal finances at work. The key for this to be affective is to have them try it themselves. Allow them to make the mistakes now, than later when it counts. At the end of the day, we want to give our children the necessary resources to be successful in life. While financial literacy will take time, it will be the biggest impression your children can take away when they get that first paycheck and provide for their family.