How To Teach Your Kids About Money… Let Them Fail

Personal Finance - Millionaire Mob - May 2, 2019

Every parent’s goal is to save money for their kids future. There are a few effective ways to save money for kids. One of the most effective money management tips might be allowing them to make mistakes… Here’s how to teach your kids about money.

When it comes to parenting, every parent wants their kids to be better off than they were (at least the good ones!).

Whether this means encouraging them to work hard and apply themselves in school, or giving them the life opportunities and experiences they never had growing up, the ultimate goal is to raise a healthy, happy, well-adjusted young adult who’s ready to leave the nest at an appropriate age (read: before they’re 35 and have lived in your basement for 15 years).

When it comes to giving their kids a solid financial foundation, most parents often don’t know where to start. Maybe they take their kids to open a bank account when they’re teenagers.

Perhaps they encourage them to start a paper route or get a job so they have some spending money.

Or maybe it’s the old standby allowance routine of giving their kiddo a lump sum of money, occasionally tied to some sort of work around the home, that they can spend on whatever their heart desires.

And that’s usually where the financial education ends. Junior applies to college, takes on the anchor of a student loan, and after 4 years gets a job in order to pay off the debt he’s just incurred.

A little while later, he gets married, takes on another massive debt load (a mortgage) when he buys a house and spends the better part of the next 40 years trying to climb out of the hole he’s dug for himself.

Depressing? Yes, but it doesn’t have to be this way. Parents are in an incredibly powerful and unique position to set their kids up to have the type of financial success that most people only experience in their dreams.

But how can you as a parent give your kiddo the skills and tools they’ll need to be money rockstars? Well, oddly enough, it all comes down to striking a fine balance between letting them fail and being there to support them (notice I didn’t say SAVE them) when they do.

The Foundation of Money Management for Kids

Your child needs you to give them the basic tools to have financial success. No, I’m not talking about showing them how to set up a Roth IRA or open their own brokerage account.

They don’t need to know about all the finer points of investing, interest rates, or inverted yield curves (not sure what that is or why it’s important? Don’t worry about it, and neither should your kid).

No, all your child needs to learn in order to master their money are 5 simple Pillars of Money which will have them light-years ahead of their peers.

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