As parents, we want to give our children the best start in life. But when it comes to money, many of us don’t know where to begin. Financial literacy is not something that’s taught in schools, so it’s up to us to educate our kids about it and come up with the money lessons to teach our kids.
This is a collaborative post
In this blog post, Debt Relief Canada from A. Fisher & Associates share their top money lessons they believe all children should be taught from an early age.
Alongside helping hundreds beat debt each year, Debt Relief Canada offer free advice on everything from credit card debt to consumer proposals and more.
Here are 10 money lessons to teach your kids below:
1. The value of money
Help your children understand that money doesn’t grow on trees and that it’s important to be mindful of how we spend it. Explain to them the concept of “needs” versus “wants”, and teach them to be patient when it comes to making purchases. This is one of the best money lessons we can teach them.
2. Savings is one of the best money lessons to teach
Encourage your kids to start saving early on. Help them set up a piggy bank or savings account, and show them how they can watch their money grow over time. Explain the importance of delayed gratification, and teach them that they can’t always have everything they want.
Teach your kids how to budget their money. Show them how to track their income and expenses, and help them set aside money for savings and future purchases. Help them understand that not every purchase is a necessity, and that sometimes it’s ok to say “no”.
Teach your kids about the basics of investing. Help them understand how compounding works and how they can grow their money by investing in stocks, bonds, and other assets. Explain the importance of diversification, and teach them to be patient when it comes to investments.
5. Credit is one of the most important money lessons to cover
Explain to your kids what credit is and how it works. Teach them about the importance of maintaining a good credit score, and help them understand the impact of late payments and high interest rates.
Teach your kids about the dangers of debt. Help them understand how easy it is to get into debt, and how difficult it can be to get out. Explain the importance of only borrowing what you can afford to repay, and help them understand the impact of late payments and high interest rates. This is one of the most important money lessons you can teach.
Teach your kids the importance of giving back. Help them find a charity or cause that they’re passionate about, and encourage them to donate money or time to those in need. Help them understand that giving can be its own reward, and that we all have the power to make a difference.
8. Scams must be covered in your money lessons
Teach your kids how to spot a scam. Help them understand that there are people out there who will try to take advantage of them, and that they should be wary of anyone who asks for personal information or money. Explain how to report a scam, and help them understand the importance of being careful when sharing personal information online.
9. Identity theft
Use money lessons to help your kids understand what identity theft is and how it happens. Teach them how to protect their personal information, and explain what to do if they think their identity has been stolen. Help them understand that identity theft can have a lasting impact on their finances and their reputation.
Teach your kids about the importance of cybersecurity. Help them understand how to keep their personal information safe online, and explain the risks of sharing too much information on social media. Explain how to spot a phishing scam, and help them understand the importance of using strong passwords.
By teaching your kids about money from an early age, you can help them avoid some of the pitfalls that many adults fall into. Help them understand the value of money, and teach them how to save, budget, and invest for their future. And finally, help them protect themselves from scams and identity theft by teaching them about cybersecurity.
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