By Robert Stitt.
When you look at the number of athletes and other celebrities who have lost millions of dollars and ended up filing bankruptcy, it should be no surprise that many youth and young adults are not being taught financial literacy. Simply put, they do not have the skills it takes to make intelligent and informed financial decisions.
If you would like to ensure your children grow up with the necessary skills to navigate the world of finance, take a gander at some excellent tools and techniques that can set them on the right path.
- Work with the banks. Banks want children to understand finance. Children that are financially literate grow up to be adults that are financially literate. If you are having flashbacks of Marry Poppins and a bank manager trying to rip money out of a child’s hand, it’s nothing like that. Today, it is easy to set up an account for your children, and to get them used to the idea. There are plenty of games like The Great Piggy Bank Adventure to teach them about finances.
- Talk to your children about quality, name brands, impulse buying, and buyer’s remorse. Once they have the information to make good decisions, allow them to make mistakes. Let them spend their money on things that are not good investments while the dollar amounts are still small and the damage can be controlled.
- Give your children the opportunity to work with money. By giving your children a chance to have weekly income, they can learn to manage finances. It doesn’t have to be much, even $4 or $5 a week is useful. Teach them to save, to give, and to budget. You might even want to impose a “tax” to get them used to the idea that the money they earn does not all get to stay with them but is used to contribute to the “common good”.
- Teach them about the dangers of electronic money. When you don’t have to handle cash, it is easy to spend money that you don’t have. Today, money is not just spent using credit cards, but even phones can be used to purchase goods with a simple swipe.
With a little work up front, your children will have the skills they need to balance their lives, whether they pull in million dollar salaries, or not.