When teaching money to your children, it is difficult to arrange things that are not going well. “Oh, that’s convenient! Sharing will begin soon.
Unfortunately, it is unfortunate that experts say that it is important to cause money problems with children at a young age, but according to research, parents tend to speak about bullying, drugs, smoking rather than finance Families and investments .
Neale Godfrey, author of “Money does not grow on trees,” says Author Neale Godfrey, “There is no way to expect children of all ages to understand money without having to talk about it, parents are financially responsible It is for educating children.
So what should you talk about? Explain that Godfrey thinks it is the five most important financial discussions with your child.
1. People earn money for their work
Teaching how important the important work is to children is part of what Godfrey calls “rustic program”.
“It is to bring up children who understand that money does not grow in leaves of leaves.When your child begins asking for money to buy things, you learn what it means to have a job You can see that you are ready: “If you know that you are using money that is usually about 3 years old with your child’s purchased money, please tell me where the money comes from,” Godfrey said say.
The best approach: After discussing how you chose your career and what you are doing at work, ask what you want when you are older. Also consider consider paying extra responsibilities related to your child career. For example, if you want to be a veterinarian, you are responsible for walking dogs, bathing, feeding, and paying extra costs for work.
If you want to buy things, you have to take a budget
Many parents forget the children to explain what to do with money as soon as they earn income. “If you are a child and you get a mass, nobody will tell you what to do, I will grow up thinking that everything will be spent,” Godfrey says.
Good habits: Children over three years can receive supplements, and this allowance gives birth and saving ideas. Godfrey proposes to use four transparent glasses (the visual aspect is important for children). 10% for charity, 30% for early money, 30% for saving in the future and 30% for long-term savings with eyeglasses on the day of permission.
“When participating in the business, please allow children to point out what they want,” says Godfrey. If she is inexpensive, she can pay with “money”, but for more expensive things like bike and video game systems, long glass.
3. Return is as important as saving on your own
If your child has extra glasses, he knows that some of his money has to go to charity. Well, all you have to do is choose a charity and make it a habit.
The best approach: Return is an important part of life, but the concept may require a small child. “The easiest way to explain why so important to your child is to first do something about doing something, such as involving the child, helping the food, sorting out clothes for homelessness, As Godfrey said, as you get older, look for organizations of the charity navigator you are interested in and donate regularly to this organization on the day of the pocket money or at the end of the month.
4. Good financial responsibility
Children who earn money with pocket money often have problems moving to chequing and savings accounts, credit cards, thinking. It is your job to teach your children how to use these vehicles with responsibility.
1. Review and saving: Set up a child at the age of 5 using a savings account. (Please see here for details on opening a child’s savings and saving account.) Today, most banking transactions are done online, but it is important to leave themselves to banks See where his money goes please. Was good.
As soon as he opens chequing and savings account, he pays money to his / her child, deposits it to the bank and deposits it. Please open an online account that can be monitored together and explain how online banking works. You can also reserve various categories of savings accounts, such as charitable organizations, mid-term savings, long-term savings.
2. Credit card: As soon as the child prove that it can handle the basics – he will manage summer jobs, save the amount in the savings account, not overpay the current account. He established an ideal prepaid credit card that he wants to go to college or want full time job. Prepaid cards are better because they function like normal credit cards, but these cards can not be borrowed because they have certain expenditure limits.
3. Investment: Godfrey says that you can introduce the concept of investment around the age of 10. “Let’s find out what stores your kids love and business and buy a small amount of individual stocks and grow up,” Gottfried points out. “As you get older, finding companies and products that will resist the economic downturn, and thinking about why this is important in long-term investments.”
Bearie Farnam’s memo of LearnVest’s Certified Financial Planner (CFP): “If you have a stock in a company your child likes, you can teach the concept of ownership and volatility, but focus on the stock itself We emphasize the bad part: ignoring the most important aspects of successful investment by selecting the appropriate level of risk for the target and diversifying the portfolio.
I encourage parents to ensure that their children are not aware that successful investments are in the selection of titles. Instead, introduce important concepts of diversification and try not to place all the eggs in one basket. The goal is to expand the risks to various types of investment. ”
5. Everyone has to pay taxes.
Please explain to children that all taxes are deducted from salary and everything will work in the country. Please tell me that the salary earned by the job of harassing the lawn and doing housework is not the same as the salary earned for the house.
Best practice: Starting at age 10, Godfrey is suggested by placing your child in a 15% tax deduction slip and subtracting that tax from the tax deduction for family tax deduction. “Of course, in real life this money is used to keep the street clean and safe, but at home I vote every quarter about how the taxpayer’s money will be used Gottfried. “It helped to avoid cutting later when he received the first salary and he said” Who is FICA and why is he taking money from her salary Do you?