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Parents should start teaching their kids about money issues as soon as possible. That is so their kids will have the best chance at building a solid financial future. You can use simple lessons to help your kids to become money smart at an early age. Here are a few of the most important things that your kids need to know about money.
Money is earned by working
Your parents were absolutely right when they taught you the importance of a dollar. They taught you that money does not grow on trees and is only earned through hard work. You need to teach your kids the value of a dollar by having them perform chores around the house for income. This way they will have a greater appreciation for what it takes to make money.
Money needs to be saved
A penny saved is a penny earned. You should start your kids off on the right foot by teaching them about saving money. You should teach them how to save a percentage of every bit of money that they get. They will learn by saving a portion of their allowance and gift money. This money can either be placed in a piggy bank or in a savings account. They will be impressed as they see how small amounts of money can grow into larger amounts over time.
Money should be invested
It is always a good time to teach your kids about investing. You can start them on the road to creating wealth by starting them off with some safe investments. You can help them buy savings bonds or get a certificate of deposit so they can start earning higher amounts of interest on their money. They will be motivated to invest more money when they see how easy it is to earn a positive rate of return on their money.
Money should not be wasted
A lot of kids find themselves in credit card debt in their latter teen years because they do not understand the trap of debt. Their money is wasted trying to pay off high interest credit card debt. This is no way for a young person to live. You can teach your child to avoid using credit cards to finance their purchases. They should learn to use cash to buy the items that they need so they are not wasting money on interest.