I firmly believe that you should teach your kids about money today. Not tomorrow. Not later. Today.
Of course, I’m sure most of you looking back wish you knew more about the money game earlier on in your own lives. It might have saved you from making some big mistakes.
However, it is more than that for me. The reason I am teaching my kids about money today comes from a very personal place.
My mother didn’t know the fundamentals of money
When my father died, my mother felt the need to save every penny she could. She didn’t know how to make more money, so she did her best to make what we had stretch.
There was the constant fear we would run out of the life insurance my father had left behind. The knowledge of how money worked could have saved us so much hardship.
So, if you’re ready to get the conversation started to teach your kids about money, here’s some things to go over.
Teaching kids appreciation vs depreciation
I advocate teaching how money works to the kids in your life. The first thing they need to know is that it won’t make them happy.
Instead, teach them that money is meant to be traded for things that they need; and that is the reason that earning it should be a priority.
My daughters understand that money is just paper and its worth is based on the value we decide to give it. They also understand that value goes up and down based on what is going on in world.
That brings us to the next thing to teach your children about money.
Don’t make money, collect it
First of all, no one makes money. That is actually called counterfeiting and is illegal. This next thing you should teach your kids about money is not how to make it, but to collect it.
There are two ways to collect money.
- Trade time for it (i.e a traditional job where you work set hours)
- Trade your cash for a hard asset and collect passive income
Personally, I prefer the second option because the asset will continue to appreciate and generate cash flow while earned income depreciates when you don’t invest it.
That’s why I’ve taught my girls to never get rid of my real estate investments, because they will take care of them for years to come.
At the end of the day, that’s what Creating Wealth Investing in Real Estate is all about.
I hope this article has helped you in ways to start teaching your kids about money. It’s not difficult to understand, but it’s so critical for your children’s future.
May you and your kids be Great,