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7 Lessons Your Kids Should Learn About Money

7 Lessons Your Kids Should Learn About Money

You’re never too young to learn some basic money-management steps that will help you become a financially responsible adult. Most schools teach our children absolutely nothing about financial matters, so it is your responsibility to teach your children everything you can. If you’d like to help your kids become frugal adults, start with these 7 lessons your kids should learn about money.

1. Money Is Earned

In today’s dreadful economy, raising your children to expect things to be handed to them with no effort would put them at a serious disadvantage in the workforce. I’m not saying you should pay them to do household chores that they should already be doing for no financial reward (because who doesn’t want to live in a clean home free from clutter?), but do encourage them to open a lemonade stand, help you prepare for a yard-sale, and mow neighbor’s yards when they are old enough.

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2. Want Vs. Need

Children need to understand that what we need always comes before what we want. If they want a new toy or video game and cash is tight, explain that money is a limited resource and things like clothing and food come first.

3. The Power of Patience

Set some ground rules: for every $10 your child earns, at least $1 must be saved. Get three separate piggy banks and label them like so: savings, spending, and giving. Do not force them to put away money for giving, but do explain that other children in the world aren’t as fortunate as they are, so giving would be a very nice thing to do. Take a look at the money in the savings pile once per month and let them marvel at the power of patience. Explain that you have to save money just like they do to afford super fun things like vacations to a theme park and ask, “Aren’t you glad I’m smart enough to save money?” 

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4. Shop for Value

When your child is old enough to grasp basic math, take them with you to the grocery store and involve them in the process of bargain shopping. Show them two identical items at different prices and ask them which one looks like the better option.

5. You Can’t Have It All

Everyone deserves an occasional splurge, but there is no denying the fact that buying everything we want would result in financial disaster. Take your child to a toy store, give them a $20 bill, and allow them to pick whatever they desire as long as it fits the budget.

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6. Old Stuff = New Money

When your child grows out of clothes and loses interest in toys, plan a yard sale or trip to the thrift shop. Go ahead and use this opportunity to get rid of any unneeded stuff of your own. Sell anything you can and give away the rest.

7. Giving Feels Good

At Christmas time, participate in a charity like the Angel Tree or Operation Christmas Child. Ask your children how much they love receiving presents. After they express how wonderful it feels, explain that other families don’t have enough money to buy nice things for their children. Choose a less fortunate child to buy presents for and involve your children in the process. Take them to the store, tell them what a child that age might enjoy, and give them a set budget to spend on presents. Your child will be more thankful for the blessings in their life and more likely to become a charitable adult.

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What are you teaching your kids about money?

If you’re a parent, I’d love to hear your thoughts. Are there any lessons your kids should learn about money that aren’t included here? If so, please feel free to leave a comment!

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Daniel Wallen

Daniel is a writer who focuses on blogging about happiness and motivation at Lifehack.

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Last Updated on March 29, 2021

Life Insurance: A Secure Way To Protect Your Future.

Life Insurance: A Secure Way To Protect Your Future.

Life is a journey full of ups and downs. No one can actually predict what might happen the next moment; there are times where the happiest moments do not even take a second to turn into the gravest. Planning for your future can help you face such unwelcomed but irrepressible situations with much ease. We all want to make every memorable event of our life more special and to cherish all those moments happily and worry less, you must financially plan your future. But no one has control over life and death. Who would wish to see his family suffer in his absence? Insurance hands over the financial jeopardy of life’s happenings to an insurance company.

Importance of getting a life insurance

No one has control over life and death. Nobody would like to see their family suffering in an absence, and that’s why many people recommend life insurance. A life insurance plan is one of the best ways to secure the future of your family, even against those financial troubles after an untimely demise. These plans are safe and credible, and you could trust them for your family’s better future.

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On the other hand, a life insurance policy is a contract between a company (insurance provider) and policyholder in which the insurance provider ensures to pay a certain amount of money to the nominated beneficiary in case of the policyholder’s death during the term of the agreement. There are different types of insurance plans, and it is important for you to know the benefits of those plans such as a funeral, medical or some life expenses provided they are mentioned in the agreement.

Choosing the right insurance plan

If you’re about to select an insurance plan, you should consider some important factors:

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  • The time at which you start investing in a program and the number of family members you want to get insured. Obviously, a married man with two children has different needs compared to a single one. The number of persons who are dependent on an individual also varies from person to person.
  • The next thing you need to consider is you and your family needs. What are your child’s dream, your retirement plans, for how long would your dependents need financial support, any personal injury, etc. And do not forget those events or situations that will surely demand a huge sum of money.
  • The next thing one must consider is your current income. You should preferably choose a plan which you can afford.

Now you must be having a pretty clear idea of how to choose the best plan for you. Further, you should also compare various plans offered by different companies and numerous sites available online that help will you to compare them.

Differences between life insurance plans

Here’s a short brief of some plan categories you can choose according to your needs:

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  • Term Insurance Plan – You have to pay once, and your nominee gets the paid money under your misfortune demise. It ensures a person for a fixed time. If you survive the policy period, you do not get your premiums back.
  • Whole Life Policy – This plan continues for your lifetime. Under this, the policyholder has to pay regular premiums, until their death.
  • Endowment Policy –  In case the individual dies during the tenure, the beneficiary gets the amount assured. If the person survives the policy tenure, they gets back the premiums paid with other investment returns along with several other benefits.
  • Money Back Policy – In this a portion of the money invested is returned to the investor at regular intervals. If you survive the insurance term you get the entire amount back; else the beneficiary receives the entire sum assured.
  • ULIPs – These are the life insurance plans that offer you future security plus wealth creation options.

Many people do not opt for whole life policy and endowment policy because of the high amount of money you need to pay, while others may prefer to opt for these if they have a high life expectancy. Surely you will find the best one for you.

So what are you waiting for? Plan for your future and live a happier and carefree life today.

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Featured photo credit: aryehsampson.com via aryehsampson.com

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