4 Things Most of Our Parents Didn't Teach Us About Money
- Many of the lessons we learned from our parents were passed down to them from their parents.
- Unfortunately, a lesson or conversation that is often not had between parents and children is around money, therefore, leading to many people's lack of financial literacy.
- Teaching foundational money principles can help your children prosper.
Life often goes in cycles. Many of the lessons we learned from our parents were passed down to them from their parents. For most households, those lessons ranged from the "birds and bees" to why going to school and getting an education is important. Unfortunately, a lesson or conversation that is often not had between parents and children is around money, therefore, leading to many people's lack of financial literacy.
The good thing is that you can break the cycle. Being financially literate not only affects you but the generations after you. Here are some foundational money principles that you can teach your children, or future children, that will help them prosper.
The Importance of Saving Money
Saving money is one of the best disciplines you can have in life. Having money saved and set aside for an emergency or a rainy day can take away financial stress.
In addition to saving money to have a safety net for yourself, if you have kids, there are also numerous activities to help them start to save money.
Two notable activities to help your child(ren) learn to save money:
1. Match what they save.
The incentive of matching what your child saves can help motivate them on their habit-building journey of saving money. You can choose to match 10%, 50%, or whatever works best for you.
2. Open a savings account for them.
Once you move money from the piggy bank to a bank account, it feels as though you are taking your money to the next level with extra security.
How to Create a Budget
Creating a budget can be as simple as getting a pen and paper and writing out your income minus your expenses. Budgets help us to plan accordingly, keep us on track with our goals, and stops us from overspending in one category versus another.
Who You Bank With Matters
Who you bank with is (almost as) important as who you date.
Here's how to choose a bank that will fit your money needs:
1. Trust. You want to trust your banking provider. The bank you choose should help you feel safe and secure about storing your money with them.
2. Communication. You want to have open communication with your banking provider. If you aren't able to talk with your bank about your money issues, that's not a good sign.
3. Benefits. You want to keep your money with a bank that can provide you with benefits. If the only activity in your bank account is monthly maintenance fees, it may be time to switch banks.
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Investing Helps to Grow Your Money
One key to building wealth is investing, and investing your money is a sure-fire way to grow your money at a faster rate than storing your money in a low-interest rate savings account. You can build your wealth through stock market investing, mutual funds, or bond investments. Do your research on specific investments that will align with your financial goals.