One has heard of a famous saying” Waste not want not”. What does one’s child see when he switches on the television or surfs the internet. Glamour, wastage and extravagance. Have money spend it, don’t have borrow money spend it is the norm. What would ones child learn from watching these programs but the message conveyed? One’s child has a very impressible mind and learns from observing and watching. What would he think when he sees his friends or peers show off costly goods and accessories? One’s child needs to learn how to manage money as early in life as possible before bad influences creep in. Once extravagance sets in money disappears so fast one’s child wouldn’t know how to manage his money and then it is too late. The debt trap awaits.”Debts are fun when acquiring them but not while retiring them”.
One can teach his child about debt through an exercise which requires no small measure of courage. Experience from one’s own past mistakes. One might have spent too much money on clothes and had none left when he required a new pair of shoes in a hurry. One can also teach his child how he fell in debt through excess spending using a credit card. There is no harm in owning up to past mistakes. This practical approach is the best way to teach a child on how excess spending using a credit card leads to debt owing to very high interest rates charged on them. Remember rather go supper less than rise in debt.
When ones child is in high school he learns about compound interest. How compound interest help one’s money double over time. One can now teach his child about fixed deposits and how the power of compounding helps in doubling savings with time. Sure it doesn’t have the glamour or the high risk and return of the stock market but one’s savings are safe and increase through the interest component in a slow and steady approach .Remember “ The most powerful force in the World is compound interest”.
There is a famous saying “Being unable to say no can make you exhausted, stressed and irritable.”One’s child is very smart and might throw a tantrum trying to embarrass one in public until he gets what he wants. Even though it might be hard one should know when to refuse and not bow down to his child’s pressure tactics. One needs to teach his child to spend only after saving. Teach one’s child the famous saying “ A small leak will sink a great ship”. Always beware of the small expenses.
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