The education system today may be fantastic at teaching our children reading, math and writing skills, but when it comes to teaching them about real world issues like money, it gets a failing grade. Where did you learn about money? Did you have rich parents that taught you everything? Did you read about it? Or did you learn by trial and error in the real world? As a parent, the best gift you can give your child is knowledge about these basic money management strategies
Pay yourself first
Managing money and building a secure financial future is not all about rates of return and investment amounts but more about habits. As soon as your child is old enough, and starts dealing with money, start teaching them one of the core principles of wealth creation, pay yourself first. We all know if we take the route of paying all the bills and then investing what is left over, there never seems to be any left over. So instead, take the alternative approach of paying yourself first. Teach them to get in a habit of setting aside 10% of whatever they earn and put that money aside for long term investing. They are to treat this like any other bill the HAS to be paid. This money can then be invested to start the little miracle of compound interest working for them. By starting them with this habit at a young age, they will continue the habit into their adult lives when they actually have bills, but with the confidence they can actually pay their bills.
Dollar cost averaging
This is another habit strategy to teach your children. As children are entrusted with money, even if it be a small amount from an allowance or money from a part time …Read more