We teach our children values and principles which we hope will see them through their lives. School also try to import good values and give them an education which will enable them to get a job or to further their studies at colleges and universities.
Yet most of us neglect to teach our children one very important lesson of life and that is how to manage money.
Money – you cannot live without it. Having it can bring you joy but lack of care in managing it can bring you misery – ask anybody who has creditors knocking at his door or worries about repossessors coming to take the car. This is not the type of life that we would wish for our children.
Money problems may not disappear even if you earn more money. Even rich have money problems because they do not know how to manage the money and find themselves knee-deep in debt.
The answer lies in handling money wisely. Yet for parents the financial scene today is so different from what we faced before.
For example, we never had so many banks ‘begging’ us to use their credit cards. Today it is also possible to buy on installments without even having to pay any deposit.
Without preparing our children for the world of easy credit, is it any wonder that today we have bankrupts who are still in their twenties?
Because it is a a whole new world out there, LAI – Life Auto Insurance hope this blog will able to help parents and peoples in guiding their children to understand some basics of personal finance.
Our children, students, brothers and relatives will one day have to make decisions which go beyond how much of the pocket money to spend at their school canteen and how much to put aside to buy that something special.
Decision about money will get more complicated when they get their first holiday job or leave school.
For example, as a child leaves home for further studies to work, she should have fundamental knowledge about how much it costs to live on her own. She should have an idea of how much to spend on rental and her rights as a tenant. Advice should be given on how to save on food and transport so that she can survive within her allowance or income.
It is also important that she is made aware of the dangers of easy credit. She should be taught that credit cards can turn out to costly affairs, something which she will not be told when she signs up for the cards.
She should also be informed that hire-purchase or easy-payment schemes involves more than just small monthly payments. Even if the goods are repossessed, for example, she can still owe the bank money.
She should learn about the above and lots more besides. With the right basic personal financial knowledge, it will be easier for her to better analyze the financial products which she will constantly be approached to invest in. Hopefully she will be less likely to fall victim to financial scams.
Handling money wisely is after all one of the essential living skills needed to survive in today’s world.
Until then, we hope this small blog can contribute to enhance the financial literacy levels of our children and we ourselves.
