The Importance Of Teaching Children Financial Literacy

I feel it is very important to teach children aboutthings they want instead of saving until they can afford
financial matters. One reason that parents do notthem. Previous generations started with small houses
teach their children about money, is because they areand cars and worked and saved and gradually
not sure they know how to handle money either. It isimproved their way of life. Many people today, start
one of the things that is not always taught in school.first jobs and expect to have a big house and
We earn degrees in order to earn a living but are notexpensive cars right away. They figure if you can
always taught how to handle the money we earn.afford payments you can afford it. But that isn't
It is important to start teaching children about moneyalways the case. And living that way, you have no
when they are young. You can use the world as yourmoney for savings. It is important also to have an
financial classroom. Real life triggers lessons you wantEmergency fund. Especially in today's economy with
to teach your child, and since you are probably handlingthe way the job market is. People get into trouble
money regularly in front of your child, stop and takewhen they get used to living paycheck to paycheck
two minutes to explain what you are doing.on two incomes and then if one (or both) of them lose
In the book "Money Doesn't Grow on Trees" by Nealetheir jobs then they will be in trouble.
S. Godfrey there is a story about a father and his son.Another source for information on teaching children
He had taken his children on a trip across the countryabout finances is Dave Ramsey has books directed to
to see their grandparents. Everytime they stopped tokids and a Financial Peace Jr. kit with a book about
eat, one of the sons was always straggling behind.saving your money and charts and envelopes to
Finally, when they were almost home, the father askedmanage their money. One of his principles is to Save,
him why he always late. He said he was picking up theGive and Spend. His program has envelopes labeled
money his dad kept forgetting on the tables. TheSave, Give and Spend.
father realized to his son his leaving money on theIn the book "Money Doesn't Grow on Trees" some of
table looked like he had forgotten his money.the chapters cover How to teach your children the
Another big issue, is teaching the difference betweenbasics of money management, When to start your
wants and needs. I know when you are a child it ischild on an allowance, How to use the World as your
hard to know the difference, but if we don't teachFinancial Classroom. It also has games for different
them when they are younger, it is harder when theyage groups on teaching children about money.
are older. That is part of the problem how peopleIn closing, I feel the most important issues are to teach
spend money now. They grow up not knowing thechildren to pay themselves first and save some of
difference between real wants and needs. Then getwhat they earn, difference between wants and needs
into trouble with debt because they feel like theyand the power of compound interest.
deserve anything they want.It's not How much you earn that matters, its how much
Many people put their financial lives into jeopardyyou Spend!!
because they want the instant gratification of buying