If there is anything parents can learn in this day and age, it is the importance of teaching their children about money at an early age. This knowledge was not often shared with many people who are adults now, making them unable to effectively plan their finances. Here are five good reasons why you should start teaching your children about money right now.
They Will Be Able to Avoid Debt as Adults
People who are more financially literate are less likely to end up with debt as adults. This is because of their ability to make good decisions concerning money from an early point. They will be good at managing the funds they have, which will invariably help them to live well within their means. Staying debt-free can improve your life a lot as you have access to a lot of opportunities and services from different institutions. A debt-free person will also likely have a good credit score, 35% of which depends on how fast you clear bills in your name.
They Develop Good Financial Habits
Good financial habits take time to cultivate, which is why it’s important to start them early. When you teach your children how to use their money well, note that they will also be watching you and learning from the example you set. You should therefore make it a point to practice good habits, which include avoiding impulsive buying and saving up for bigger purchases to avoid taking loans for them. As they grow with this knowledge, they will find it easy to put it into practice once they start getting their own money.
They Will Be Better Able to Set and Achieve Goals
When someone has a good idea of how money works, they are in better control of setting and achieving goals in life. They can aim to achieve certain accomplishments in a specific timeframe, and this will be made achievable by having sound financial literacy. Without it, even health becomes a problem because as many as 59% of adults surveyed said that they don’t get dental care because of the costs associated with it. You can help your children grow into healthy adults who have the ability to plan their lives well.
They Can Amass More Assets as Adults
Adults with financial literacy find it easier to amass assets than their counterparts who lack financial literacy. This is because of the ease with which they can manage their finances and plan for purchases, whether big or small. Assets that are obtained without debt are valuable because you have full control of them and can use them to get more assets or plan your finances as you see fit. Teach this to your children early on, and they are less likely to struggle with money and property like many adults currently do.
They Will Understand How Money Works
Understanding how money works is what is termed as ‘financial literacy’. With this valuable knowledge, they will have an advantage in the way they approach finances. Bills, loans, taxes, and more are not going to be foreign to them and so they will not get caught in any of the money traps that exist. Of the taxes that the federal government collected in 2015, 11% were corporate income taxes. For people in corporations, it is important to understand how taxes work and thus avoid hefty fines caused by defaulting or other actions that are caused by a lack of information.
Ignorance is not bliss where money is concerned. In fact, it is downright detrimental. Arm your children with knowledge about money at an early age, and let them have a better chance at succeeding in a happy, debt-free life.