MONEY PRINCIPLES YOU MUST TEACH YOUR KIDS

Starting now, starting today your kids if they are five years old and above need to have an understanding of money. Money is integral to their future success and well being, they cannot afford to be financially illiterate!  Financially illiterate children grow up  to make reckless financial decisions and end up retiring broke and depending on their own children to take care of them.

Does this cycle sound familiar? This is what happened to most of our parents’ generation, and will also happen to ours if we do not urgently undertake to do two things – first completely educate ourselves on sound money principles and two, teach the same to our kids.

The following principles below must be taught to your offspring with a view to getting them to understand money for what it is, and what it can do for them. You should never stop teaching them up till the day they leave home:

The first thing you need to teach your kids is that money doesn’t just fall from heaven; it is earned and efforts must be made to earn it. They need to know that the process either entails developing oneself, getting qualified, getting a job, gaining experience in order to get promoted or get a better job so as to earn more. Alternatively you must develop a business idea, source capital and overcome many obstacles in the marketplace to get money. The important thing is for them to learn that either way a lot of hard work and efforts must be put in to have money.

Secondly parents need to emphasise that the purpose of money is for multiplication, not spending. Most people have the erroneous belief that money is meant to be spent. Rather we are meant to put money to work so that it can multiply continuously to produce wealth. Money spent cannot be multiplied.  Discuss with your children what systems can be used to multiply their money and be practical putting their savings and allowances into ventures such as buying shares, mutual funds so they can better appreciate how money is made.

They must also understand the difference between needs and wants. This will help them become more prudent in their spending. Before spending on an item they must ask themselves – Is this a need or a want? Wants can be postponed or done without, while needs must be met at all times. This leads them to better understand that one must live within his or her means. Strive to discuss your purchasing decisions with them

Another lesson worth teaching them is that money and wealth must be decently and ethically acquired. This idea might not be popular to many people but it is still highly possible to amass wealth decently in Africa. It is good to pass on the biblical injunction that, “A good name is better than riches.” Possessing virtues like honesty, integrity are very important as they will lead to lasting wealth in the long run. They should not be envious of anyone who acquires wealth illegally.

Fifth, children must understand early enough that it is not all the time that you will get what you want. Human needs and wants are unlimited; however the resources needed to meet these needs and wants are limited. It is not advisable for parents to always give a child what they demand for, rather turn the event of refusal into a money lesson and explain why they cannot get what they want. Children raised properly will understand this lesson and accept that conditions are not always perfect.

Doing good deeds with money, being generous and helping others with money are also imperative for children to understand and imbibe. Greed and stinginess must be avoided at all costs. The culture of giving and helping others must be ingrained into their psyche. Our children must be mindful of other people’s needs and wants once genuine and seek to sometimes assist, whether one has a lot or a little. The giving life is the winning life. Making occasional sacrifices is divine.

Seventh children must also reap the benefits of being accountable with money. Teach them to draw up a budget and track what they are spending their money on. You are in better control of your resources when you know where your money is going. Monthly budgeting helps one to make better spending decisions because a budget helps you plug leaks, holes and wastages in your finances.

Finally teach your children to save and imbibe a savings culture. Educate them to learn to put aside some money for investing, and also if they want to acquire something that is needed. You can even ask them to come up with some percentage of the amount while you provide the rest so that they can better value money.

Parents the future of the next generation depends on this! Don’t imbibe only moral values in them; also instil money values in them. This is highly essential more so when you consider that no school teaches these principles to anyone. Start today and endeavour not to make the same mistakes your parents made with you!