There’s never a wrong time to learn about personal finance. However, getting an early education in managing money can only make life easier and prime young people for future success.
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To better understand potentially complicated topics in finance, these youngsters need guidance from experts and instructors who can translate difficult concepts into clear, easy-to-understand terms. And there’s no better place for this education to begin than the comforts of home.
GOBankingRates asked Annette Harris, accredited financial counselor, certified financial fitness coach and owner of Harris Financial Coaching, to talk more about the lessons she’s taught her own children.
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Ins and Outs of Investing
As Harris began teaching her children about personal finance, her youngest daughter showed particular enthusiasm for learning about investing. Harris set up a managed custodial account for her daughter, who, at just 14 years old, began investing in earnest.
She got a head start on her mother, who said she started her own investment journey in her 20s, focusing on savings bonds, CDs and retirement accounts. Harris added that her daughter has now learned that it’s important to understand her risk tolerance when investing.
Credit Card Management
To help her children gain experience in building good credit and managing credit cards, Harris made them authorized users on her own credit cards. In addition to the first-hand practice, she made a point of explaining the necessary elements of maintaining a credit card.
“I emphasized the importance of being aware of credit card balances, due dates and interest charges, and encouraged them to pay their balances at least semi-monthly to avoid late fees and interest,” she said.
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Tracking Purchases
Knowing that someday, her children would have their own checking accounts, Harris wanted them to get in the good habit of staying mindful about their spending habits as a precursor to balancing their future accounts.
She has them write down their purchases every day. One kid uses an Excel spreadsheet to log their expenses, while the other takes a more analog approach by writing everything down in a notebook. Regardless of how they go about it, they’re still practicing awareness around their purchases.
It’s Okay To Ask Questions
One of the most important lessons that Harris has imparted to her children is that, no matter how much you learn or how confident you grow, you still won’t know everything — and that’s okay.
“Even when I don’t have all the answers, I teach my children that it’s okay to be uncomfortable asking questions so that we can all learn and grow,” she said. “Finding the answers together starts conversations about money and prepares them for making sound financial decisions in the future.”
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This article originally appeared on GOBankingRates.com: I’m a Personal Finance Coach: Here Are 4 Money Lessons I’m Teaching My Own Children
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