Now may be the perfect time to teach your children about financial independence. There are plenty of real-life examples in the media of how not to manage your finances. To really teach children money management skills, they must learn to handle money personally and to make consequential decisions on how to manage it.
An allowance is an ideal way to set a solid financial belief system for your children that will have a lasting effect well into adulthood. Money management requires discipline obtained through practice, trial-and-error and observation. It's also learning to balance desire and practicality when it comes to financial issues.
Not everyone agrees on whether you should pay your child an allowance based on services rendered, such as the completion of chores, or whether it should be given freely with chores being an unpaid necessity of family life. Positives are seen in both options. The following are tips to start your children on the road to financial mastery:
Self-discipline is the key to success in life and a successful money manager will need to develop this attribute. Experts agree that teaching kids to save, invest and make wise spending decisions will go a long way towards ensuring they prosper as adults. An allowance can be a powerful tool for teaching children lifelong money management skills.
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