As a life planner and business coach, I find one of the main things people lack is a basic understanding of financial principles. I wonder — how much easier could their lives have been if they’d been taught these basic facts as children?
As adults, we know money doesn’t grow on trees. Instead of allowing the young people in our lives to learn this the hard way, let’s choose to teach them the basics of living with financial wisdom while they are young. I encourage you to make a difference in the lives of your children, grandchildren, nieces and nephews by learning and then teaching them these five basic principles.
MONEY HAS A COST
It’s essential to teach our children that we must give something to receive money. Whatever your job or work schedule, you are trading hours of your life in exchange for the income you receive for your work. Teach children to see value in work, no matter the job or the pay scale.
LIVE WITHIN YOUR MEANS
Parents must teach this by our example, not just our words. Simply put, if you can’t afford it, don’t buy it. Do not be ashamed to tell your children something is not in your budget or that you are saving for it. My husband and I use the 80-10-10 rule; 80 percent of our earnings pays our bills and provides for extra things we enjoy, 10 percent is set aside for savings, which includes retirement planning; and the final 10 percent goes to charity. I believe in tithing, so my 10 percent goes to my local church.
WANT VERSUS NEED
How many times have you heard a child said they NEED something when they really just WANT it? Children must learn the difference. They need food, clothing, shelter and love. They want the latest toy or trendy fashion item their friends have. They want all the sweets in the candy aisle, but a wise parent does not buy it for them.
If your children want something outside of your budget, encourage them to find ways to earn and save enough to purchase it themselves. When that happens, there’s a greater chance they’ll attach value to the item, and they’re more likely to take better care of it.
Have you been purposeful in teaching your children the importance of giving to others? No matter our situation, it’s always possible to find someone with greater needs than we have. Being generous can mean giving our money to help others, but it also can mean giving of ourselves to help others. Find an organization that aligns with your values, and schedule time for you and your children to volunteer with them. Spend time afterward discussing what they saw and felt, along with why it’s important to give to others.
MONEY IS NOT THE CURE FOR LIFE’S PROBLEMS
Having more income does make life more comfortable, but money can’t bring fulfillment, nor can it correct bad character. If money itself were the answer to life’s problems, celebrities, wealthy people and their children would not have such broken lives. Money can buy friends and fun, but what happens when the money runs out? Teach your children that while money is necessary in today’s world, it is people who matter most. Their lives and yours will be richer for it.