Increase Your Child’s Financial I.Q.
Raise your child’s financial I.Q.; teach them how to make and manage their money. Financial experts agree that early childhood is a great time to teach children the skills of money management. This early financial education can lay the groundwork for financial success in the future. Often parents are reluctant to discuss money and financial issues with their children. Most parents think their children are bored or uninterested in the process. However, this early financial education is an important step to financial success in your child’s future. The registered investment advisory firm HCR Wealth Advisors knows that early education about money has a positive effect on a child’s financial future.
Start with an Allowance
Children need to understand that money is not free. They need to know that money is not freely distributed, it is earned. Money is given to an individual for providing goods or services. An allowance is a great way to teach children about money. The child can earn their allowance for completing simple tasks, such as cleaning their room or walking the family dog. It can be encouraging to increase a child’s allowance if the tasks are always completed on-time. Then the child understands the value of consistently completing their chores.
Help your Children Create a Budget
When your child earns money through an allowance, show them the value of creating a budget. Have the child list their expenses and income on a sheet of paper. This is an important step, so the child can visualize the budget process. Now, granted your child’s expenses may be something such as buying a new video game, or purchasing candy or other treats. However, this is an important step, so the child can see how they need to budget their money to meet their expenses. Every financial expert agrees, that budgeting is a skill that needs to be taught to children to guarantee future financial success.
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