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Here are four money lessons I’m teaching my own children.
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There is never a wrong time to learn about personal finances. However, getting an early education on money management can only make life easier and prepare young people for future success.
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To better understand potentially complicated topics in finance, these young people need guidance from experts and instructors who can translate difficult concepts into clear, easy-to-understand terms. And there is no better place to begin this education than in the comfort of home.
GOBankingRates asked Annette Harris, a certified financial counselor, certified financial preparer and owner of Harris Financial Coachingto talk more about the lessons she taught her own children.
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Pros and cons of investment
When Harris began teaching her children about personal finance, her youngest daughter showed particular enthusiasm for learning about it. investing. Harris opened a managed custodial account for her daughter, who, at just 14, began investing seriously.
She had a head start on her mother, who said she started her own investing 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 your 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 their own credit cards. In addition to first-hand practice, she made a point of explaining the elements necessary to maintain 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-annually to avoid late fees and interest,” she said.
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Purchase tracking
Knowing that someday your children would have their own checking accountsHarris wanted them to get into the good habit of keeping an eye on their spending habits as a precursor to balancing their future bills.
She makes them write down their purchases every day. One child uses an Excel spreadsheet to record their expenses, while the other takes a more analog approach, writing everything down in a notebook. Regardless of how they do it, they are still practicing awareness around their purchases.
It’s okay to ask questions
One of the most important lessons Harris imparted on 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.
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“Even when I don’t have all the answers, I teach my kids that it’s okay to feel uncomfortable asking questions so we can all learn and grow,” she said. “Finding the answers together starts conversations about money and prepares you to make sound financial decisions in the future.”
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This article originally appeared on GOBankingRates. with: I’m a Personal Finance Coach: Here Are 4 Money Lessons I’m Teaching My Own Kids