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Why Learning Financial Responsibility Early is Important

By Charles Hopkins Published 09/19/2006 | Entrepreneur

Without a doubt, it is incredibly difficult to become rich. After all, if it was easier, why wouldnt everyone be doing it? It takes years of careful saving, investing properly in stock markets and bonds and lots of self control to ensure that you do not spend all of your money as soon as it enters your hot little hand. However, even if you will never be able to reach that million dollar dream, it does not mean that your kids will not be able to in their lives. That is why teaching your children financial responsibly as early as possible is so important; so that they can become better, more productive citizens and hopefully earn millions of dollars for themselves in the process.

Teaching your kids may be difficult, especially if you or your spouse are not exactly the best role models when it comes to being frugal; fortunately though, as long as you can lay down the foundations for successful financial responsibility at an early age, your kids will be able to learn and retain all of the most important teachings about how to manage their money well.

The first thing you need to teach your kids about financial responsibly is how to manage their money correctly. This means that they need to know how to save and spend their money in such a way that they are saving as much or more than they are spending. A good way to get your kids off on the right foot is to give them some form of allowance. Every Saturday when I was young, my parents would give me an amount of money that was equal to whatever grade I was in. For example when I was in fifth grade, I would get five dollars a week and when I was in ninth grade I would get nine dollars.

Giving monetary rewards for good grades is also a great idea to help your children learn financial responsibility and become more successful at school at the same time. If you choose to give your child allowance, you will need to subsequently teach them that their money is theirs and they can either save it to earn extra money and use it later for something really good or spend it right away for something quick and cheap that they will simply forget about in a week or two.

Teaching your kids to handle their money properly is, quite possibly, one of the most important lessons that you can teach your children. While the proper way to save and spend their money tops the list as one of the most necessary parts of financial responsibility, you also need to teach them how to pay bills, how to avoid falling into debt and all of the basics of the tax laws. If you can teach your children how to save their money properly and how to avoid the wrath or creditors, they will turn into successful adults who can easily manage their own finances and possibly become millionaires in the very near future. As with most things in life, the lessons that you learn when you are young are the lessons that stay with you throughout your entire time on this world.