How many times have you found yourself burning the midnight oil while working? As you start getting tired, a voice starts echoing in your head. It keeps telling you your hard work will pay off eventually. After all, you’re doing it for your kids.
Even that Home Loan you took out to buy a new home for your family. One day it will pass on to your children along with the rest of the wealth you left them.
However, you certainly don’t want them to waste it all away when you’re not around anymore. Sure, kids nowadays tend to get carried away with Credit Card spending and don’t really realise the value of money or the importance of investing.
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As a parent, it would certainly hold your children in good stead if you could impart your money management skills and experience to them. And to help you get started, here are 5 things you can do before leaving a substantial amount of wealth behind for your kids.
- Teach them the value of money
If you want your kids to utilise your hard-earned money well, you need to first teach them the value of money. Giving them the right financial lessons at an early age can help them a lot as they grow older.
You can start by giving them a fixed sum as pocket money. Through this method, you can teach them the importance of budgeting and the basic rudiments or accounting. This will help them learn to keep track of and manage their money early on in life.
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- Test their money management skills
Every child needs to be handled differently. It’s quite possible that one of your kids takes to money management like a duck to water, while another blows all of his or her money on a new electronic gadget.
To figure out who needs more guidance, you need to observe them well and see how they manage things. Keeping a track of how they use their pocket money is a good way of testing their skills. If you notice any shortcomings with the way they spend their money, you can nip it in the bud before it gets out of hand.
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- Use incentives
They’re children after all. You need to give them some incentives to get them to do something as boring as managing money. Even we, as adults, find it hard to do something without some form of incentive involved.
You can use some of your kids’ favourite things to act as sources of motivation for them. If your child really wants the latest PlayStation, use that as an incentive and set certain savings targets for them to achieve.
Once they achieve that target, they get what they always wanted and also learn the value of saving and managing money. It’s a win-win situation all around.
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- Gift without gifting cash
Try eliminating the practice of giving cash as a gift. If you keep gifting your kids cash every now and then, they may not value it enough and just spend it all away.
Instead of cash, you could pay for something else, like paying for their hobbies or maybe open a Fixed Deposit in their name. Explain to them why you did it. They probably won’t understand its importance right now, but as they grow older they’ll come to appreciate what you did for them.
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- Show them how YOU manage your money
Your kids are likely to learn a lot from you. This holds true for all financial matters as well. If they see you regularly managing your finances, they’re more likely to follow suit.
Make sure you take some time out to show them how you handle your finances as well as the day-to-day expenses (both big and small) that the family incurs. There’s every chance that this will influence them positively, especially when they inherit whatever you’ve left behind for them in the future.
Additional Reading: Money And Kids – What To Teach At What Age
As a parent, it is of vital importance to teach your kids the value of money as well as the best way to use it. By keeping these tips in mind, you can be sure everything you leave behind for your children will be in safe hands.
Want to open a Fixed Deposit for your child?