When do you teach your child about money?
Posted on June 19th, 2011 under Wealth of Advice
By Francisco J. Colayco
Kelan ba dapat simulan pag-isipan ng kabataan ang personal finance? Sa college ba? High school? Ano ba ang dapat gawin ng mga kabataan upang maging financially secure sila in the future? What habits must they observe as early as now?
Ano ba ang kadalasang pagkakamali o misconceptions ng mga Pilipino, lalo na ng kabataan, pagdating sa paghahawak ng pera?
Money should be taught to any child as early as possible. This is the time where the child starts to ask about how to acquire goodies. It is more the attitude about money that is important. Attitude is best taught by example. Two important principles that you can show by your action is “Value for Money”. Show the proper regard for money like thinking well before buying anything. You can even think aloud on the pros and cons of buying something. Your child may not be contributing to your thought process but will probably absorb your attitudes while listening.
For example “Should I buy this expensive cut of beef when my budget is so limited? It would really be nice but the lower priced chicken will give the same protein anyway so I will just buy the chicken so I can put the money to better use. After all, I (or whoever provided the money) worked so hard to make this money. We should always put it to good use because after all ‘money does not grow on trees.’ Maybe, when we have saved and our savings have grown, I can afford the beef.”
So you go through this kind of thinking and talking exercise while you are shopping with your child for anything and hopefully both you and your child will get used to the idea of putting value to whatever you use your money for.
When your child knows how to count and can understand the value of money, you can start asking your child to help you count your money and choose what to use when buying things. You can even use play money first. When your child is ready, you can start using the principle “Income minus Savings equals Expenses.” Again, thinking aloud, you show your child to set aside savings first before deciding on how much is left to be able to budget.
These simple ways of saving is not taught in school. Even accountants, banking people and economists who are very much involved in numbers and computations may not know how to manage their personal money. They only know how to do their work for their company.
When your child is already in high school and college, it would be good for you to have read my books so, together, you can practice all the principles, which will help both of you.
Teach yourself first so you can teach your child. Join our seminars. Check out www.colaycofoundation.com or call 637371 6373741
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