The Top 5 Lessons: how parents should taught your children about money

The Top 5 Lessons: how parents should taught your children about money

Did you know that personal finance lessons should start as early as when one is only four years only?

It is said that money makes the world go round. Therefore, it is prudent to know how to handle it as soon as you can for this will affect your financial health.

If your parent did not teach you about money, it is never too late to learn. Here are a few tips help you and pass to your children:

Saving

Personal finance experts say that saving skills should be introduced to children at the age of four as it can have a huge impact on those who embrace it early.

According to Warren Buffett, the third wealthiest man in the world, failing to learn the habits of saving properly early is the biggest mistake people make

You don't have to start training your children by giving them money. Even candies can do.

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Budget

Oxford Dictionary defines a budget is an estimate of income and expenditure for a set period of time.

money

Children should start learning how to budget by the age of eight. It is important to keep track of your money and where it is going, says Jennifer Woods, a Forbes columnist.

Investment

Kids, and everyone else, should know that although people invest in things that they hope will make them more money, it doesn’t always happen that way. It is never a good idea to put all of your money in a risky investment, because if you do and the investment fails, you could lose it all, Woods writes.

When you are committed to understanding what you will invest in, you also acknowledge that you cannot do all investments. You cannot spread your time and financial resources too thin, advices Nduati.

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Debts, Loans and Credit Score

A debt is money that you owe someone that needs to be paid back. Kids need to understand that once you have a debt, it doesn’t go away until you’ve taken care of it, states the columnist.

Similar to debts, loans should be taken when there is no other way out and must be paid back in order to boots one’s credit score. A good credit score will help in the future if you want to borrow more.

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Taxes

Well, this is a bitter reality to many. Maybe if you had gotten used to it while growing up, giving something back to the government could not be so difficult.

Here is a piece of advice from Jeff Nauta, a Principal with Henrickson Nauta Wealth Advisors, as quoted by the magazine:

Image: The East African

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