Kids are kids and making mistakes…you know it! Even adults make them.
But, we adults are there for rectifying those mistakes and not repeat them.
If that sounds like a life lesson, then you need to know that somewhere these little to huge mistakes in the financial realm make us suffer a lot.
And if they have been cultivated in the young mind for some unknown reasons, then that person becomes the victim later.
Educating students and young people with money has been a very organised trait in Western countries. It has been praised a lot.
It is also done to make a kid be liberated with money in the early stages of life so that he or she gets to be an advanced individual dealing with money while growing up.
However, like all other educational phases, this literacy period is sensitive.
They can make mistakes, and if not corrected, their outcomes can turn serious with time.
“I haven’t explained what lending might mean to my 12 year old. I have been teaching her about money since she turned 10. She’s been a fast learner. Both me and my wife included all sorts of money lessons to her. But, we missed explaining how lending works and gave her slight introduction to it. Later when she took out 5,000 pound loan just to get her home renovated that barely needed a 2000 pound; we were a bit shocked. But then we realised that we haven’t been transparent to her with loans and that has been a mistake…a mistake she is had to suffer.”, said John, a 51-year-old freelancer.
Just like John, many parents have reported what financial miseducation can do to children.
In order to be alert with that and to nullify their possibilities from an early stage, this blog has been written.
Read it on to find out more about what these errors are.
Looking for a loan on free debt consolidation online is okay as these loans can save a person from debts in an immediate sense.
But, if these loans are taken frequently by someone, then there might be a problem with financial literacy in the past life of that person.
And that past time can definitely be childhood.
Your kids are still kids, and you can monitor them in a better way to start observing their financial behaviour. Once you do that, you might understand different patterns of their money related behaviour and can shape a solution out of that.
So, observation comes at first.
And to help you with that, the following points have been jotted down.
Interested to know about them? Well, let us read in a little detail then.
Kids tend to overspend when they want something so desperately.
This has been a reason parents never want to spoil their kids with ready money.
We have surely found instances in films or TV shows or novels what it might do to a kid when money is available to him or her abundantly.
Overspending might also become close to addiction in paying money to get the things they like.
Although it might work out as a dopamine booster, it wouldn’t do the kid any good in reality.
Psychologists warn parents about the negative effects of addiction. And if overspending reaches that level, then the kid will have serious problem-saving money while they grow up.
So, give money to the kid and give it in limit. But, more than that, you need to observe if the youngster uses it in limitation.
If your kid is a tech genius and if he or she understands nearly everything about credit cards and online payments, then that is a terribly good thing.
Unfortunately, that is not everything.
You need your kids to be educated about money, and that can start with the presence of real, cash money.
Your kids will learn to count and will discover the value of money in a deeper sense.
Using numbers (in the digital way of managing money) and learning about finance should be a secondary element.
So, keep it in that way and help your kids learn better.
Credit and debit cards are fantastic tools to educate your kids with money, and the organisation money brings for them.
With a credit card, a kid can also practise his or her mathematical skills like a pro.
Yes, they cannot use credit cards before a certain age. But they can take help of the student credit cards if they get a little older such as late teen ages.
Usually, kids will not say a ‘no’ to this.
But kids shop. They don’t stay very alert while doing so.
Plus, they might be affected by those shiny ads or marketing policies much more than us.
It doesn’t mean you are making them a miser.
You are making them frugal, and, more than that, you are teaching them the value of their ORIGINAL NEEDS.
According to First Horizon:
“As Psychology Today notes, financial acumen isn’t limited to understanding how to use financial products; it requires that kids know how to resist the constant barrage of media and marketing messages intended to influence their buying decisions.”
Take them to the shop, and they will learn valuable shopping lessons.
Tax payments involve a lot of calculations, and you have to have tax consultants to help you with that.
But you need to know what the basic idea of taxes is, right?
Did you know that taking out the same day loan for the unemployed may reduce your tax payments?
These interesting factors are very good when you want to make good financial management in your life.
Help your kids learn that.
Being lazy is a ‘no no’ for kids…it should be that way.
Your kids are accustomed to ‘seeing’ hard work.
Are they okay with ‘doing’ it and that too with a smile on their faces just like you?
Well, that should happen.
Tell your kids about hard work and its direct relationship with money. Ask them to go forward and be in the situation you face 5 or 6 days a week.
And, most importantly, reward them with money.
This creates positive reinforcement in them, and they learn more about money.
Similar to overspending, ‘impulsive purchases’ has been the thing that haunts us from our childhood.
Yes, the term goes a lot for children than for adults.
Your spending habits get random and uncontrolled with excessive money. It can again get expensive when you do not exercise control over the thing you want to buy.
And this is a type of ‘kiddish’ emotion.
Tell your kids that it is normal to ‘feel’ buying things like that. But, that is never a healthy way to maintain a good financial plan.
It may also lead to bankruptcy in the future. Inform your kids about the problems of that.
Is that piggybank you have gifted your kid on the 10th birthday still not filled with enough pennies?
Well, we have got a problem in that case.
Yes, in the early stages, kids can have an issue creating their own savings plans.
As a result, they can simply ignore putting money in their piggy bank. To reduce such errors., you can take the initiative and save money with your kid together in that piggy bank.
And then you can leave him or her to the habit.
You get the idea, right?
Now, the most crucial point!
Does your child even know what lending is?
Does she know the concept of an online instalment loan with no credit check from a direct lender?
Most importantly, does your kid know how to manage interest rates, repayments and what might happen if you are not unable to pay a loan in time?
A loan is not a sensitive service. But your financial problem is. So, taking out a loan should be a very careful process.
Teach your kids about those situations when taking out a loan can be a solution.
Tell them what the differences are between a personal loan and a secured loan.
Show them ways to organise their repayments.
Oh yes, you must not skip teaching your children that money cannot be produced.
Money can just be altered and exchanged, just like energy.
Take this example and teach children about money.
And one more good lesson!
Always teach them not to be tempted by it. Enough said!