As a parent we need to know how to aware your kid’s financial interest. Here are ways to empower the next generation, and that starts by teaching children the importance of money from a young age. If you are a parent, here are 5 ways to teach your children about money management.
(I) Never too early to start discuss money to your kids
Take this logic one step further and resolve to speak openly about money with and around your kids. In other words, feel free to discuss sensitive financial matters, such as how to use salary, how to distinguish the expenses and saving and etc.
When you talk to your kids about money, it removes the mystery and helps them make smart choices. It might initially feel awkward, but don’t let your uneasiness cause you to miss opportunities to teach important lessons and don’t be afraid to talk about the bad along with the good. They might not understand everything you told them, but that’s okay. That doesn’t stop you because you trust that they’ll pick more up with repetition and age.
(II) Lead by example
You’re your kids’ most visible and important role model. Whether you see it or not, children are always watching, so it’s important to lead by example. They will follow how you manage your money and they will do the same in their future. So the most important thing is as parent must know how to manage your money.
(III) Use board game as teaching material
Children love game and we know that. They will learn a lot of skill in game. As parent want to aware children’ financing interest, the best way is using game to teach them to learn about financing planning. For example, there is a very good board game called Monopoly is a very good game to let kid to learn how to manage their cash in hand and how to plan for their long-term journey.
In monopoly also can build their mindset for property investment. They can learn to generate their passive income if they invest property in their future life. Besides that, playing board game will get many side benefit such as negotiate skill, risk management and etc.
(IV) Giving them pocket money while they doing well
While your kid helping you for housework like sweeping floor, mopping floor and etc. You should give them pocket money equitably as a reward. It is because this will let them to know the important of active income and they using their effort to get money and they will use it charily. On the other hands, this action will also build their responsibility and helpful personality.
Don’t worry that your children how to manage the pocket they got. In next point will teach you how to let your kid to manage their money.
(V) 6 Jar of money.
We will separate and manage our income into 6 different jar to distinguish them.
The first Jar will be NECESSITIES; it will be 55% of your income. Necessities including Food, beverages, bill, petron, insurance and etc.
The second jar will be FINANCIAL FREEDOM JAR. It will be 10% of income. The money in this jar can only be used for investments. This jar is used for building wealth for your future financial freedom. You must never spend this money.
Another 10% of your income goes into the jar called LONG TERM SAVING (LTS) for Spending. The objective of of this jar is to save money for future expenses
As we know, education is very important for us. So that 10% of our income will go to our EDUCATION JAR. The more knowledge and skills you acquire, the greater your earning capacity. And the more you earn, the more you need to learn
Besides that, we also need have fun in our life. We want to live life fullness so there will be 10% of our income go to our PLAY JAR. This allows you to spend without guilt, and to also gradually improve your standard of living as your income increases.
The last 5% will go to GIVE JAR. The more you give, the more you get. However poor your circumstances may be, there will always be someone who is in an even more dire state. Besides the feel-good factor of helping others, giving away part of your income also helps you to sub-consciously develop the wealth-mentality that you have more than enough to give away.
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