7 Things to Teach your Kids About Money

September 7, 2008

Did you know that many people retire broke?

Its true. After a lifetime of hard work and having earned literally hundreds of thousands of dollars, they end up with nothing.

So where did all their hard-earned cash go? The answer is, it passed right through their fingers.
While schools are great at teaching algebra, calculus, and geometry... how many of us learned about the basics of personal finance and creating financial security for ourselves?

The truth is, the earlier you learn to handle money, the more likely you are to manage it properly and live a prosperous life.

So why not provide a little home schooling for your family and teach them the basics? Here are 7 important lessons to instill in your kids about money:

1. Save something of what you earn
Acquiring the savings habit is one of the smartest things you can ever do.

If youre reading this now as a middle-aged parent, imagine how much youd have in the bank today if youd saved 10% of everything youd ever earned.
(Its almost scary to think about, isnt it?)

Teach your kids to save a little of everything they earn.

2. Dont borrow what you cant pay back
Debt is one of the greatest social diseases of our time. The price to pay for the have now, pay later philosophy is that you certainly will pay later.

Debt imprisons you in a job you dont like, creates stress and anxiety in your life, and erodes your wealth creation program.
You will never become rich while youre in debt. Period.

Teach your kids the value of delayed gratification. If in doubt, go without.

3. To give is to get
Managing money doesnt mean hoarding it and locking it away in its own purpose-built high security jail. It simply means being careful, spending wisely, and acquiring a regular savings habit.

Teach your kids that donating money to worthwhile causes is a noble thing to do, and that the money returns to you in more ways than you can imagine.

4. Money isnt evil
Money is the root of all evil and filthy lucre are phrases youll hear banded around.
Ignore them.
Money actually brings enormous good into the world. For example:

- Creating wealth helps create jobs for others

- Investing in business helps to bring solutions into peoples lives by way of innovative products and services

- Acquiring a great fortune allows you to donate more money to charity - or even start your own trust fund

Teach your kids that money is neither good nor bad - its what you do with it that makes the difference.

5. If you dont spend much, you cant lose much!
One of the oldest wealth-creation maxims is, It takes money to make money.

Unfortunately, it also takes money to lose money.
Teach your kids the value of caution when entering into financial affairs. And let them know that many self-made millionaires started with literally nothing.

6. Get the best price for everything you can
Your financial health is really the difference between how much you earn and how much you spend. It therefore makes sense not to pay any more money for something than you have to.

Teach your kids that bargain-hunting doesnt make you a miser - just a sensible individual.

7. The fast buck is your last buck
Sooner or later everyone gets offered a surefire method of making a fortune, whether its the three-card trick, a once-in-a-lifetime investment plan, or some time-limited business opportunity only available to a select few...

Dont fall for too-good-to-be-true scams.
Teach your kids that wealth creation is a simple and timeless process based on common sense.
If you had learned the above principles when you were 10 years old, and had applied them every day of your life, would you be financially healthier today?

Teach your kids the timeless truths of acquiring and keeping wealth.

Knowledge truly is the most precious gift you can give.

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