How financially literate is your child? Thanks to Patrick Bet-David, an entrepreneur and author who says, today’s distractions are taking too much time from more important things like learning about money. Bet-David says whether kids are going to the movies, shopping for clothes or music, buying a car, trying to help support their parents or even working a couple of jobs to pay for college, money is and always will be an important part of our lives.
His tips for children to learn about the basics of money:
1. Start a habit of saving money – Whether someone gives you five bucks or you just got your first paycheck, whatever money you are making, try to save at least 10% in an account that you try hard not to touch.
2. Start a budget – Open up your own savings account and learn the basics of having a bank account. Start a budget and learn to manage it.
3. Shop around – It’s tempting to see something we like and buy it on the spot, and that’s called instant gratification. But if you go online or wait a couple of months for a sale, that same item may cost less which saves you money.
4. Avoid credit cards – If you plan on buying an awesome car, buying a house one day, or being taken seriously in any business venture, your credit score will play a huge role in how much financial companies will trust your spending habits.
5. Focus on earning – Saving is very important, but if you’re not earning money you won’t have any to save. Start thinking like an entrepreneur at an early age. Open a lemonade stand, car washing business or pet walking service. The key is to offer a service that people are willing to pay for.
6. Expect more – People usually make the amount of money they feel they are worth, and most people sell themselves short. Teach children to have a high self-image, and they will create a world for themselves that meets that self-image.
7. Download an app on your phone – There are so many apps for managing your budget and savings on phones nowadays that you can track your money on the go. Get in the habit of keeping tabs on your spending habits. Kids will have more fun doing this on their phones and tablets.
Bet-David says there is a difference between just saving money and building an awesome financial foundation, but it’s a good idea to start with the basics.
Great advice Mom! In our house, we started teaching budgeting early by keeping an “allowance log” that tracked our girl’s allowance “deposits and withdrawals” on an ongoing basis. Our daughters could check the ledger anytime they wanted to know how much they had saved and they could withdraw anytime they wanted. It was an easy transaction into a teen savings account as they got older! Patrick Bet-David has a great website full of great financial tips at http://www.goasknewton.com.
Great idea! And as you can probably guess, charts have really fueled our family’s success as well — the kids love to see and track things, and it keeps us all “on track.” Thanks for your note and the link to Patrick’s site.