In a perfect world, parents and teachers, as well as society at large, will care about making our children financially educated. In this utopian ideal money skills would be considered as important as reading, writing and counting skills, children would be taught with books about money, and ignorance of how to design and manage a budget would be treated just like illiteracy. Unfortunately, this is not the case in the real world. The public prefers loans with poor credit history rather than budgeting, is taught in schools if they are taught at all, only a few of the financial skills, but parents who have never taught themselves to manage their finances do not know how to teach their own. for children. I know that these skills were not taught at school. And you? It seems that everybody today has to realize that there is a lack of these skills, and moreover, before their lack is found. The following will describe the four basic things that everyone should teach to their child.
How to issue a cash balance?
A couple of years ago I bought a lunch at a fast food restaurant and received an invoice of $ 12.65. I gave the cashier $ 20, but then I saw that I also had some cash in my wallet. When I gave her the cash, she had already registered my twenty dollars in the cash register. Since she had calculated the balance from twenty dollars, she returned me 65 cents of money. Adding a balance of $ 7.35, she added, “I just can’t count”. Unfortunately, such situations are common. Calculators and cash registers do calculations instead of people, making us incapable of calculating and issuing the balance on our own. Failure to issue a balance is equivalent to illiteracy. Individuals who are unable to figure out how much is 20 minus 12 are vulnerable to fraud, dishonest people, and the same mathematical mistakes. The ability to easily add and subtract numbers is the most important financial skill. It can be taught through a variety of games and toys designed for calculation. It is an opportunity for parents not only to teach their children the basic skills of money, but also to repeat their knowledge and skills themselves.
How to balance income and expenses?
Many years ago I worked with a woman who did not spend her income and expenses. Since there were no internet banks available at that time, she called the bank every day to find out the status of her bank account. When she found out that there was money in the bank account, she spent it freely, despite the fact that she had several outstanding bills. In a word, for this reason, she always spent twice as much money. This is a vivid example of irresponsibility and consequences when it comes to not recording its revenue and expenditure positions. As you know, banks may also come to mysteries, but if you keep track of your financial flow, you will be able to detect and correct these errors. Recording your income and expenses is like a homework that everyone is trying to avoid. Just as children are involved in dishwashing, they should also be involved in financial fixation and care. When your children have learned to add and subtract numbers, ask them to record your income and expenses by summing up and subtracting different positions. Once they have become older, teach and involve them in balancing your income and expense, as well as showing how your bank account reports look both digital and paper.
How do I pay my bills?
For most people, the main problem with this skill is the fact that they don’t know anything about it until they start their own life and have to pay their bills for the first time. The key skill that you need to learn about billing is the organization: you need to know where, when and how they arrive, when and how they should be paid, and where and how they should be stored after they are paid. Of course, it is still important that you always have the money to pay these bills each month. For those who have just begun to live adult life, refraining from satisfying the various temptations to pay their bills can prove difficult. Just like in the case of recording and planning of income and expenses, you can learn how to pay your bills just by doing it with your parents. Teach your child everything related to paying bills – whether they receive, plan, or pay. This is a great time to teach children to look at the bank account. This is also a great opportunity to talk about the differences between desires and needs.
How do I create a budget?
Knowledge of how to plan and manage your income is one of the most important financial skills that many of us today lack. Unlike the abovementioned skills, this skill is difficult to teach. Budgeting includes activities such as managing your spending, setting goals, financial planning, and self-discipline to achieve your goals. It’s not an easy process, because even experienced budget planners are often forced to review and re-plan their budget strategy again and again to find the right one. The best way to teach this to your children is to set a good example. Budgeting, unlike money-issuing, spending and income fixing, and billing, is a very complex skill, and two identical budget plans cannot be found. If you show your children how to manage their spending, how to plan future spending, how to distinguish their needs from needs and how to deal with unexpected financial situations, they will have a sense of what to do in different situations when they live independently. The best way to start budgeting on a small scale is to plan your pocket money to prepare for major future financial challenges.