HCR Wealth Advisors deems that having a good education on financial matters is among the best skills you can give your kids. This is why HCR Wealth Advisors recommends that parents begin educating their kids about money or finances as early as possible.
Having your children know the facts about money will help them have a better financial intelligence. This will also provide the necessary preparation for their adult life. However, not all parents would like to talk about money matters with their children, possibly because they think it is not interesting enough for the kids or it’s not yet time to engage them in such discussions.
Talking with your kids about finances will help them handle their finances better later in life. HCR Wealth Advisors listed the following suggestions on how you can educate your child about finances.
- Children should understand that money is not something that is asked for without anything in exchange. Neither is it something that is given freely. To cement this in their minds better, tell them that for every chore they do around the house they will get paid. Now, if your kid wants or needs more money, tell them that additional chores need to be done so their earnings will increase.
- After they have already earned their keep from doing the chores, teach your children how to budget. Instruct them to get a single piece of paper and write their earnings or income on the left-hand side and their expenses on the right-hand side. Explain that their income must be able to cover their expenses, with necessities prioritized. This is teaching them not to overspend and to live within their means.
- If possible, open a savings account under the name of your child with you as the guardian. Most banks have this type of savings account for kids. Tell them that every time they earn something they must save or deposit a portion of it into their savings account. This will help them understand the importance of saving money for rainy days.
HCR Wealth Advisors is a registered investment advisory firm that offers investment and financial strategies to its customers. The firm was established in 1988.
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