Teaching Kids Accounting and FinanceKids need to learn from an early age about finances and accounting. Many parents are not aware that they can actually become their kids' teachers regarding this matter.
Parents wonder “how can I teach my kid about finances? I mean he's just a kid!” but actually, average children are fast learners.
There are some basic rules a kid needs to learn regarding money. Teach them to differentiate between their needs and wants, you can explain your child the many challenges that parents face by maintaining a household. How? You and your kid together, can create a chart of expenses, for example, how much does the new video game costs and how much is the electric bill? The importance of the video game for the houses members and the importance of electricity in your house. Would he be able to play video games if there was no electricity at all in the house? This will help them not to waste money when it's not necessary and to start saving it!
We as adults know that the benefits of saving money can be truly rewarding. Some kids have savings because their parents give them money and tell them “this will be helpful in your future” but kids do not understand exactly why is this money important and they end up expending the money in candies or toys. This is not wrong but let them see a bigger picture, for example, probably they watch on television commercials of amusement parks or expensive toys that really get their attention. Discuss with your kid an “allowance” and how much of this allowance will he invest in this amusement park ticket or toy, this way your kid will see how money grows and how saving money can give them an enormous satisfaction.
Bad decisions are sometimes necessary. At some point the bad decisions that our kids make are a must in their learning process. You as a parent are supposed to control their investments, but you also need to let your kids to make their own mistakes in order for them to learn. One day they could spend their savings in an over-priced object and the next one tears could fall off their cheeks understanding and probably regretting the mistake they made.
Once money is gone, it's gone and our kids should learn this at a very early age. We can help them turning into responsible adults
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