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Hi there, if you have children anytime is a great time to start them down the road of understanding and teach them how to save money, how money works, how to budget money.
It may be hard to believe but the sooner you start the better it is to set the base of knowledge that they will carry with them throughout the rest of their lives.
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Teach Your Kids About What it Costs to Run the House
Your children have no concept of what it costs to run the water while brushing their teeth or leaving the lights on in the basement or how much the cell phone bill is. Just last week I had to sit my girls (13 and 15) down to go over the cell phone bill. One of them went over their 10gb allotment and it cost me an extra $50 on an already huge bill.
I had to show them the bill and what it costs for each of us to have a phone and why it’s important to understand this is just one bill that comes to the house. We then went through Hydro, electricity, water, mortgage, car payments, insurance, and maintenance.
They need to understand that these bills have to paid monthly not when they want.
Once we went through it all they had a better understanding of why I’m as frugal as I am and why I question certain purchases on a regular basis. (I hope!)
By teaching them how to manage the bills of the house your indirectly teaching them how to better manage and save their money.
2.Explain to Your Children What Debt and Credit is
I remember when I got my first job at a department store. They gave me a store credit card. I had no idea what credit was and I had that sucker run up so fast it was insane!
Teach your kids what credit is, the different types and how it could impact their lives. You don’t need a gas card, store card, visa, and MasterCard. YOU NEED ONE CARD and its just for emergencies.
Tell them how much it costs when you consider interest charged and how it accumulates over time so when you buy a $100 item and don’t pay off the card immediately that $100 item could cost over $200 with accumulated interest over a year.
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Open Up a Bank Account
For children to understand money they need to have a venue to see their money. In a world of Interac debit cards, bank machines and Apple or Samsung Pay it is very easy to get lost in where your money goes.
To be honest I never have cash anymore I “tap” my debit card everywhere. Our children don’t see cash so they just think it magically appears. Show them your bank account and how you pay bills, your savings etc.
When they have their own account, go into the bank, let them deposit their money so they can see it in their own account.
The earlier they learn to save money and manage their money the better it is for you as they will hopefully be financially independent later in life.
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Teach them the 10% Rule
When I was a teenager I was given the book The Wealthy Barber. There is a revised edition out now but the basic rule remains true today. PAY Yourself First! It’s a great read and a funny story.
Take 10% (or more if you can) of what you get paid and pay yourself first, put it away. It’s so simple and if they do it early they will be millionaires later on in life guaranteed because of the beauty of compound interest.
If there is one thing you take away from this post is Pay Yourself First! If they get that they are well on their way to financial freedom.
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Encourage them to Start Their Own business.
Its interesting times, we see so many industries changing. Elon Musk is worried about robots taking over the world. There is something to take from that, as technology rapidly advances, technology may have a severe impact on job opportunities in the future.
Encouraging your children to start their own business is an amazing way to teach them about responsibility, managing their money and budgeting money and not be dependent on a particular industry or organization for a salary.
Whether its a lemonade stand, reselling their clothes or stuff or even selling slime (that’s the latest craze in our house) online on Etsy or eBay.
Great Resources for a place to start is Here.
I’m encouraging my girls to start blogs. There are so many things they can talk (God Knows they like to talk!) about whether its the trials and tribulations of being a teenager, competitive swimming tips, how to watch youtube for 12 hours straight or how to play Fortnite.
There is always an audience or someone with the same interest as you and there may be an opportunity to grow it down the road as a legitimate business.
So there you have it, 5 amazing ways to teach your children about managing money, how to save money and budgeting money.
Pick the time and the place that’s appropriate to talk, Like when I get a monster cell phone bill Lol!
If you like this blog please share, if you’d like to start your own blog I always recommend Alex and Lauren’s Create and Go courses. I’ve bought them all and they are by far the best resource out there you can buy. You learn from their mistakes (so you don’t have to make them as well) and as well their huge successes.
All my recommended resources can be found here, I wouldn’t recommend them if I didn’t use them myself.
If you ever have any questions don’t hesitate to get in touch at theteam@wickedretirement.com
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