A Very Important Lesson to Teach Your Kids

Teaching kids about money is hard. This is one of the most important lessons you should constantly work on with them.

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Hey, in upcoming videos we’re going to look at an effective way to teach your kids to save. We’ll look at allowances in more depth, too. But today I want to focus on something else. A lesson you should constantly teach your kids. Simply this: Money is finite. Trust me, having them understand that will go a long way toward helping them to financial literacy and, in turn, financial independence.

“Mom, I want blah, blah, blah, blah, blah.” “Sorry, but from our paychecks we have to pay for the house, our cars, our food, your clothes, baseball, still save for Florida, a trip next year. We don’t have enough money to buy that right now.” “Hey dad, can I have a new blah, blah, blah, blah, blah.” “Sorry, son, but we have limited resources.

We make a certain amount each month and we have to be careful how we spend it.” One of the big reasons I do believe in allowances is that kids learn very quickly on their own they can’t buy too much with it. The money runs out fast. Choices have to be made. There are trade offs. Again, money is finite. You know, some parents do a wonderful job at teaching this.

And although it means they frequently disappoint their kids in the short term, they are truly helping them in the long term. Work on this with your kids.

You know, unless they’re 40-years old, then, probably just back off by that point.