You may think that teaching kids investing is such a far-fetched idea considering the latest craze in all sorts of electronic toys and games that are popular among the youngsters these days. However, if you want your children to avoid any financial pitfalls in the future you should seriously consider teaching your kids how to invest and handle their money smartly. Teaching your kids at an early age about personal finance and the benefits of investing will create a huge impact on their future lives and careers. In return, you will have your peace of mind of knowing that your kids will have a brighter future.
The Importance of Savings
First, you can teach your children the importance of savings. Giving your kids an allowance will assist them on how to budget their money properly. At an early age, you can encourage them to save a portion of their allowance and even open their own savings account where they can deposit money every week or month. You should teach them how the bank works and the benefits of having a savings account.
The Importance of Investing
There is no such thing as being too early about teaching kids investing for their future. Talk about the number of ways they can invest their money. Start with smaller investments first that your kids can relate to and comprehend then gradually talk about bigger ways of investing as they progress on their understanding of the concept of investing.
The Importance of Building Credit
Don't wait until your children are old enough to use credit cards before you teach them the pros and cons of having a credit card. Show them by example how credit cards are to be used responsibly by taking them shopping with you. Explain how the interest is being charged for each time you use the credit card. Explain how credit cards are not to be used impulsively.
Fun tools that you can use to teach your kids about money
There are in fact a lot of tools that you can use for teaching kids investing and how to handle money in general. One of the educational tools you can use is the Rich Kid Smart Kid. This is a fun and interactive game that will show your kids valuable lessons in finance, such as how to make a profit, paying yourself first, dealing with debt, and investing in business and assets. For children Six and above, you can also use the Cashflow for kids board game where children will learn the concept of financial freedom.
These tools are developed by the team of Robert Kiyosaki, the infamous business tycoon who wrote the book rich dad poor dad. There are other plenty tools out there that you can use to make the teaching fun and exciting.
With the economic downturn that the world is experiencing today, a lot of job losses and business closures, it is just wise to teach your children at an early age how to handle their finances and how they can make money work for them by investing. Teaching kids investing is a surefire way of understanding the concept of financial freedom.
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