Financial education is more critical today than at any other time in history. It’s essential to increase the value of financial literacy to navigate the fast-paced life competently. In America, only 57% of adults are financially literate. It is an alarming ratio since the remaining 43% face terrible monetary challenges due to illiteracy. Your child could be among the 43% if you don’t teach them the value of managing money. For better comprehension, let’s go through the psychological research.
Psychological insight
As a result of comprehensive research, our values and attitude toward money are significantly influenced by ‘how our parents treated their finances.’ Simply put, our household is the backbone of developing our thinking paradigm. If your parents are financially literate, your outlook on money is comparatively different from a benighted individual. Additionally, a financially informed child is more likely to accomplish financial goals. This universal fact indicates the utmost importance of teaching your kids valuable lessons on money to provide them with a path and methods towards a gratifying future.
Lesson 1; Do not fall prey to victimization
In life, we are frequently confronted with devastating experiences that utterly shatter us, and we gradually lose our drive and ambition. Most individuals go through this; however, only strong-minded people can practically handle it, which originates from our parents’ nurturing.
Several individuals fall into the dilemma of blaming and belittling themselves, thinking things like, “I’ll never be wealthy,” “I can’t afford this,” “This is tough,” and so on. It occurs when parents lack to teach their kids that ‘money is an idea. It can be anything you want it to be. Some individuals strive diligently to achieve their goals. Conversely, there exist people who ‘wish’ to make it happen. The difference between both categories is evident. This solely depends on the parents’ understanding and perspective and how they choose to communicate the lesson.
Lesson 2; Interpret the ‘correct’ definition of financial intelligence
The amount of money you maintain and how hard it works for you is classified as financial intelligence. But unfortunately, financial intelligence is misinterpreted as how much money you make, which leads to repercussions of ignorance.
The right concept develops a positive attitude, allows our kids to be wise, rich, and financially intelligent, and assists them in distinguishing between what is right and wrong.
Lesson 3; Money gives you choices, not happiness
Whether you are wealthy or impoverished, make sure you are content. Success does not imply that you have no troubles and are always pleasant. Not everyone can find fulfillment in life. And it isn’t comforting to convey the impression that you’ll be happy if you get rich.
Lesson 4; Financial intelligence gives you freedom
Financial literacy is never taught in schools, so this responsibility is handed to parents. The future of your child relies on your guidance. For this reason, enrooting a good perception is essential. Several development psychologists have said that the years crucial for child development are from 9 to 15.
Lesson 5; Give them power over money
In the book Rich kid, smart kid, Robert T. Kiyosaki has explained a profound lesson, The more you need money, the less power you have.
I believe this lesson is so influential that it will sweep away the concept of being enslaved to money. Our children are exposed to a diverse range of human perceptions, either optimist or pessimist. It can sway kids if they have not been enlightened on what being powerful entails. Being rich signifies that money works for you rather than depending on it. In addition, financial intelligence can give your child the freedom you may be striving for in life.
Lesson 6; Life is perception
Life begins with perception. It treats you how you choose to perceive it. Do you know why poor people remain poor? Because their ideas are poor (don’t come at me, that’s not my claim, but Robert T. Kiyosaki’s). Regardless, money is an idea, and it can be anything you want, as mentioned earlier. But why does he encourage parents to focus on the perception of their child? Let’s ponder.
How is perception developed? As reported by the peak performance center, The process of forming a perception commences with your sensory experience of the world around you. Now, what is the world around your child? You and your spouse. Your child will learn what they observe at home. Our parents handed down the ideas of money and life. If only you could give them fantastic money lessons, imagine the outcome of their lives.
Lesson 7; Delayed gratification
Sit with your children and work on financial goals to demonstrate the concept of managing money. It will instill a formula of success in them. The surge of instant gratification is eroding self-discipline and efficiency. Instead, teach them how to strive hard and accomplish their specific aims.
Lesson 8; Keeping money rather than making money
How much money you keep is more important than how much you make since it will reflect later in life because people with a making-money mindset work for people with a keeping-money mindset. By this philosophy, you can help them learn the path to financial freedom.
Lesson 9; Pay yourself first
You are doing a fantastic favor to your child by teaching them the importance of saving money.
Lesson 10; Keep a record
Monitoring your spending has always proved to be fruitful. Make sure you give the incredible joy of tracking money.
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