One of the major effects of the global economic meltdown is that it has left many Americans very vulnerable and often times opting for online payday loans whenever they have financial difficulties. However, one of the greatest lessons that people seemed to have embraced during this time is the importance of saving for the future. As a result it has become even more important that individuals practice smart financial habits. What better way to learn about making smart investments and other financial issues than from childhood itself?
As a parent, your basic priority should be to provide a good life to your children. This includes ensuring that they have a good understanding of the value of money. It’s normal to strive to fulfill their wishes, but it’s equally important to let them know that money doesn’t grow on trees. Just because you never learned about budgeting and financial planning but still turned out successful in life, isn’t reason enough why you should not teach your kids some basic financial literacy skills. Remember that there may exist wide differences between the economic situation of your era and that of today. For instance, today’s job market is much more unstable. Your kids must learn to spend money wisely otherwise they may set themselves up to make trips to payday loan lenders.
Children should learn to differentiate between wants and needs. With the amount of overexposure to advertising gimmicks that are all meant to increase consumerism, almost all products and services are nowadays targeted at children as their potential buyers. If your child doesn’t understand the value of money from an early age, he or she will constantly fall prey to marketing strategies pointed towards spending during his life. Additionally, many schools haven’t included financial education in their curriculum, making it a sole responsibility of parents to ensure that their kids are financially literate and can make the best decisions for themselves.
There are numerous ways you can teach your children to realize the value of money. To begin with, you can teach your child how much money he should spend by insisting that he keeps an expense diary. A diary will help them record all their financial transactions that are related to their allowance/ pocket money. Over time they will see how they are spending their money and can see the difference between “wants” and “needs”. You can encourage them to save for bigger items by giving them a piggy bank or change counter.
Another great way of imparting financial knowledge on kids is by letting them participate in the daily household budgeting. By doing so they will grow up seeing the cost of everything around them, whether it be a gallon of milk or a trip to an amusement park. milk or their night pajamas, is actually paid for. You can also teach them about borrowing money my loaning a certain amount to them and then charging them interest and possibly having them make payments. This will give them a taste of the concept of borrowing with short-term payday loans.