Teaching your Child to be Successful
“Money makes the world go round” they say and it’s our job as parents and life teachers to prepare our children for this world. Some of the most important lessons we can teach our children are those of financial management. These lessons will set them up for life, no matter what career or profession they end up in.
The importance of a Financial Education
Academic education is important, but it is not the only education your child should receive. Often kids who don’t do so well in school have trouble sitting still, listening to lectures and reading. Even the great Thomas Edison was labelled dumb and a ‘scatterbrain’. His teachers assumed he would never amount to anything. He left school and went on to become one of the world’s greatest inventors, and founded General Electric. Thomas Edison worked hard, managed his finances well, and was successful.
That said, in today’s age there is a huge difference in salaries between college graduates, and their non-graduating counterparts. On average, non-college graduates earn about 60% of what a college graduate would earn.
A financial education though is more than just earning a degree. Financial education is an understanding of money, cash-flow, investments and more. However, not every five year old is interested in reports, bank statements or property research.
An easy task to set for your child is to provide three different piggy banks. Label them “Savings”, “Investments”, and “Spending’s”. Explain that “Spending’s” is like regular pocket money. Spend it and it’s gone. For each dollar they put into “Savings” they will earn 10c each month as long as they don’t take anything out of it that month. For each dollar they put into “Investments” they will earn 50c, but they only receive the rewards at the end one full year.
The different piggy banks mimic real life money scenarios. This simple task will help your child to develop a basic understanding of investment, and encourage them to use money wisely. For more information about term deposit accounts, Australian readers can check out UBanks high interest term deposit accounts.
Different Sides of the Table
To get ahead in life school teaches us to study hard, earn a degree, and then find a good job. School teaches us to be employed. Some of the biggest earners and most successful business people are those who are self-employed and employers.
Make sure your child understands the difference between being an employee, and being an employer. Being an employer can mean big earnings, but with it comes great responsibility.
If we imagine we are at a job interview, we walk in and are sat at a table. Opposite us sits the head honcho; the boss. How have they reached their position? Have they worked up through the company, or started the company from scratch? Whatever the case, our future is in their hands.
It is an important lesson that we should teach our children; to show them the difference between each end of the table so that they can choose where to sit.