10 Ways We Fail Our Kids Financially
5. You don't have any "you will thank me later" moments with your kidsThese moments could be declining to give them the amount of allowance they want or making them pay for their own car if they want one. When they are responsible for the payments, they are forced to learn how to use the things they enjoy within their budget.
4. Your kids don't know how to take care of what they ownWhen something your kid has suddenly stops working, it doesn't mean you should automatically replace it. The worn look of the cell phone isn't only because it isn't this year's model, it's also because they expected to get this year's latest model and therefore didn't feel it was necessary to take care of it. The things your kids own should be properly maintained and taken care of so they don't need to be replaced every year -- a lesson that can save tens of thousands of dollars on car purchases when they are older.
3. You don't teach your kids how credit cards workAt some point your kids are going to be exposed to credit cards, and when they are, it's best they understand exactly how the credit card works to avoid a lot of unwanted debt. Credit cards certainly have a lot of advantages, but those won't make up for using the credit card in a poor financial manner. If they learn nothing more from you, they must know to pay off the credit card bill in full each month.
2. You don't teach your kids the power of compound interestKids want to be rich, and the easiest way is to let money compound over a long period. If you teach them this, they will listen. The sooner the compounding begins, the easier it is to create wealth. By showing your kids that putting aside a little money in their early years will mean they won't be panicking at the thought of what to do about retirement when their own kids are the same age, you will save them countless nights of stress and fighting.
1. You don't teach your kids not to spend everything they earnThis one lesson can make up for not teaching a lot of the other lessons, especially when combined with teaching them about compound interest. Even better, it's one lesson you can begin teaching them when they are small and continue until it has become an ingrained habit when it's time for them to live on their own. If you have been financially failing your kids up to this point, this is the place to start. E-Mail This Article to a Friend >>
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