Where do our kids learn about money? Unfortunately, many children do not have a clue of how to properly handle money. This is evident in the way that they use it and also shows that no real value is placed on money. For many of them, money is simply a means by which to satisfy their immediate or short-term desires. No significant effort is put into learning how to acquire it nor how to grow it, nor how to properly manage it.
The sad thing is that our educational system does not adequately educate our kids about money; neither does it adequately educate them on how to create wealth. So if not the formal educational system, then where else can children learn about money and personal finances?
It is first and foremost the parent’s responsibility to teach their children about the importance and value of money and how to manage and grow it. The unfortunate reality however, is that most parents are not able to carry out this vital function as they are still trying to learn it themselves. And so the cycle continues from one generation to the next, the cycle of poverty and mediocrity.
It is incumbent upon parents to teach their children at least the basics of how money and the economy works, what it takes to acquire money and what it takes to create wealth. Here are a few of the basic lessons that parents need to learn and pass on to their children:
• Money is important and we cannot live without it.
• Money is a unit of value that is attached to products, services, assets and debt.
• The only means of acquiring money is either to earn it from working a job or creating it through the production of goods and/or services.
• The more valuable your skills are at earning or creating money is the more money will come to you.
• Do not spend all the money you make, save and invest some.
• Learn to manage money properly.
Parents must make the effort to ensure that they give their children a solid financial foundation to start their life.