3 Essential Money Values You Should Incorporate In Your Kids
Here are a few money values that you, as a parent, absolutely must incorporate in your children in the interest of their long-term success.
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We all understand the impact and importance of having a proper set of money values in place. But how many of us really make a conscious effort to inculcate them in our kids from an early age? Today's Instagram addicted post-Generation Z youngter is overly concerned about outward appearances, and parents all too often yield to their demands for the latest gizmos or designer dresses, without paying heed to the long-term damage being caused in the process. Here are a few money values that you, as a parent, absolutely must incorporate in your children in the interest of their long-term success.
Teach your children that there are no free lunches in this world, and they really need to strive in order to acquire "assets". Not just that, teach them that the degree of payoff is proportionate to results, effort, or a blend of both. For instance, you may promise them a really expensive phone if they score a certain grade, but a lower model in case they score a notch lower. When the crunch moment comes, make sure you don't go all soft and yield to their demands! This is a valuable life lesson that will teach them to work hard for their money.
Numerous experiments, including the famous marshmallow experiment conducted at Stanford, have proven that individuals who are able to delay gratification in exchange for higher payoffs at a later date, do a great deal better in life, overall. Unfortunately, the quick fixes that are available to today's typical teenager are the scourge of this ability. It would be a wise move indeed to inculcate this ability in your kids, by promising them better "payoffs" if they are able to wait. To make the process even more rewarding, you can put in a process where your kids earn virtual currency or some form of credits over time, for completing tasks or being at their best. These credits can later be utilised towards the partial acquisition of the object of their desire!
Risk and Reward
Go beyond piggy banks and teach your kids some real investing techniques early on in life! For instance, you could start a SIP in their name, while keeping them in the loop about where their money is going and how it is expected to fluctuate in the short term but grow in the long term. When their fund value falls, explain to them how risk and reward are correlated, and how their interplay results in long term wealth creation. When it bounces back again, congratulate them for showing tenacity and patience in the face of rough markets. In doing so, you'll be grooming a very successful long-term investor who will be able to override her behavioural fallacies and really grow their money in the long run!