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Today we are going to continue in our Major Components of a Healthy Financial Plan series by discussing what to teach your children about money. Teaching your children about money is important because financial education at school is almost nonexistent; therefore their only source of education on financial matters is at home. Even if you are not the best example of handling money, it is still ok to teach your children about money. The first key to teaching your children is to establish the connection between work and money. You do that by encouraging work and rewarding them when the work is accomplished.
After working hard and earning their money the next key is to teach your child what to do with it. There are three main things that we do with money and teaching and encouraging your children to do all three is important. The first thing we do with money is save. Saving a little bit of money each time you earn it teaches your child good discipline in savings for big purchases in the future. The second thing we do with money is spend it. For most children this is not a problem but teaching your children to enjoy money now instead of hoarding it all for later is good for them to learn especially when they earned the money themselves. Finally, the third thing we teach our children to do with money is to give it. By starting young, children will experience the joy of giving and build good habits for a lifetime of giving.
Teaching your children about money today will teach them valuable lessons and help establish them on the right path financially. By doing wise things with money yourself and then passing that on to your children, you are changing your family tree!