Tips on how to raise financially independent children

Most bad decisions many adults make in their lifetime is as a result of having very little or no financial literacy background. Many of us if not all lack basic skills when it comes to matters concerning money.

You will find that most of us are knee deep in student loans, behind on home payments and rising interest rates from bank loans that could have easily been avoided, if our parents had taken the time to teach us about money.

This is why it is important to arm your children with financial literacy early enough so they develop habits to save and build rather than spend like we do. You will be setting them up for success and they will be grateful.

To start off your little boy or daughter on their financial journey here are a few tips worth teaching them about money:

Avoid buying your children everything they ask for but rather encourage the art of patience and saving to get what they want. If for instance they get allowances for chores, let them set aside a sizeable chunk to contribute towards a particular goal.

Explain to them clearly why saving is important and the benefits. This way, they will do it willingly. Let them see the pros this comes with and if need be, set up a bank account for them or get for them a clear jar where they will be putting their money.

Knowing they are saving money towards a certain goal will encourage them to spend less and store away more.

Let’s keep it real, many of us have made regrettable money choices and wouldn’t want our kids following the same path of wastage and poor financial decisions.

For this reason, you should tell them about your current financial position-good or bad, how you got there, mistakes made along the way and what changes you have implemented after learning the hard way.

Uncomfortable as it may feel, this is a good starting point to bring in the importance of making a budget, saving and investing. This also doesn’t mean you burden them with your problems, just highlight the mistakes.

How will your child know how much they should set aside when they don’t know how to budget? Avoid the guessing game by teaching them how to budget no matter how little the money they have may seem.

Also, the next time you’re planning for the month, include them in your household budgeting process so they can have a clear picture and get the understanding of how things work.

If they own a mobile devices like most children do nowadays, a simple budgeting app will go a long way in teaching them how to plan their money.

If you don’t teach your children how to make money someone else will. And better pray it isn’t the neighborhood bully who sells drugs. You as the parent should create awareness about investing, starting a business and how to make money the right way.

Bring to their attention get rich schemes, online scams and the allure of quick return on their investment through betting and gambling.

If they’re very young, give them different business ideas they can start with your help that are easy or pay them per chore they do.

Let them know the sacrifice making money and the satisfaction spending it wisely comes with as well.

Children see and do. If you want them to live and spend responsibly, it must start with you. Let them see that you have a budget in the first place which you stick to religiously, how you separate between needs and wants and the importance of living within your means.

You can’t teach them financial responsibility when you don’t practice it yourself.