Teaching kids about money is one of the most important responsibilities parents have. How to manage money effectively is a very important skill and it is critical to help your child develop it. The earlier they start, the better off financially they will be in life. We all know that it is not just about the money ... and all about what a difference financial security can make to all areas of our lives! Imagine your child’s future knowing that financial peace of mind equals success in everything they do that relates to money and the spending of it.
It’s most likely that you have seen or heard examples illustrating the importance of starting early which demonstrate how using compound interest and the benefits of having your money working hard for you, rather than you having to work hard for it create long term financial success. Not only does this stand true, there is another factor supporting the fact, that starting early to teach your kids about money can make a huge difference. According to sociologist Dr Massey, children go through three major developmental stages, the first stage being between the ages of 0-7 years which he refers to as the Imprint Period. It is at this stage where your children become almost a cookie-cutter imprint of you and unconsciously model you in every way. This includes your values, attitudes and beliefs, and money is something that most of us hold an emotional attachment to. So it is very important to check your behaviours and even the things you say because your children are unconsciously modelling you.
What do you notice about how your children ask for money? What do they understand about where money comes from? Are they saving money they spend to buy important things, or do they spend it as soon as they get it? Where did they learn to do that and think like that? Are you showing them the whole picture around money?
Money Management for Kids is also all about getting them into great habits. We all know that most of life is habitual, as you tend to do the same things day in and day out. These habits, good or bad, define who you are. The key is being able to control them, which can take time and considerable effort. If you have ever tried to change your diet or exercise routine because you wanted to either lose that extra weight you put on or just to get healthy, you can understand what’s required. You literally have to unlearn all of the bad habits you’ve picked up along the way before you can form new ones!
Imagine if you had used budget planner in a fun and exciting way as a child to manage your money. Do you think this would have made an impact to your financial situation if you started doing this when you were only six years old? (By the way ...Congratulations if you were!) As mentioned previously, developing effective money habits is critical to being able to have money as a resource that is exchanged to get what you want. Now consider how much easier would it have been if you had developed resourceful money habits before you even knew you were learning them? Imagine if your parents had taught you great money management habits as well as they taught you to clean your teeth!
At Money Toolkits, our focus is to teach money management for individuals and families which is done through our Family Home Pay System and/or our MAGNET Money System. The main purpose of the Family Home Pay System is to have your children asking themselves how they can generate the money they need to buy what they are after , rather than constantly asking you to buy things for them.
Your kids making money for themselves as early as possible is what it is all about! Depending on your child, they may even be capable of starting as early as two years of age. Obviously the type of tasks allocated will depend on their capabilities and age, but again, we are focusing on forming great habits. As your child gets older and requires a higher pay check each week, one alternative is to look outside the family home for alternative ways to earn an extra income. Why not support them in starting up their own business?
There are many ways for kids to earn money that are simple, easy to use and work that also cost very little to set up. All it takes is a little bit of imagination and discussion with your child and they can be on their way to starting their own business.
The advantages of teaching your kids to set up their own businesses are many more than the concept of getting paid. Kids will learn vital skills that could never be learned in a classroom such as money management, the value of money and time management and leadership. In addition to these, they also learn the following:
- Marketing Skills – Marketing is a wonderful skill because kids are learning how to create excitement around whatever product or service they are promoting. Companies spend huge sums of money to get the message out about their product or service. Think of all of the millions of dollars spent on advertising every year, whether it’s print, TV or internet? Marketing professionals are vital to the success of every company and your child is learning these skills at a very young age.
- Sales Skills – Selling is an invaluable skill that can help your child in every area of life, both professional and personal. These skills can be used to persuade customers to use a product or convincing the college interviewer that you are the right choice for that college. Selling happens all of the time. People often say they don’t like to sell, but they usually don’t realize they do it all of the time. Having your kids learn sales skills early and recognize they are doing it can give them increased confidence and an advantage in every situation they face in life.
Learning how to budget is the next step after your kids are earning their own income and this is where the MAGNET Money System steps in.
The MAGNET Money System is the system that many parents who weren’t fortunate enough to have finically savvy parents themselves, are now using to learn to manage their own finances. They are choosing to teach their kids at the same time they are developing new more resourceful money habits. It is all about becoming very aware of what you have been doing with money so far in your life and then making some new decisions about how you want to create your future regarding wealth. Go to the Money Toolkits Shop for further details on this learning system that can really help you shift your thinking and money habits.
Parenting skills are learned, none of us are born knowing how to help children learn about money. Congratulations on stepping up to take responsibility for your money management habits and learning how to pass resourceful habits onto children!
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