The concept of financial management should be taught to children as early as possible. Knowing the concept of money management early on can give children a good foundation to manage its earnings in the future.
In addition to academic education, children must also be taught life skills education will be equally important for the development later when dewasa.Salah them is a personal finance management. Teaching children an understanding of financial governance, the true should be started early.
However, it must be tailored to the age of the baby. Financial management skills are very important for everyone because the benefits will continue to feel until retirement future. Parents as a central figure in the financial education outside the school have an important role. This role will be reflected in how children manage their finances.
A study in the United States shows, the lack of knowledge of children in the midst of today's consumptive patterns can be dangerous. Research reveals that one in six students in the country do not understand that the stock of long-term profitability rather than multiple bonds.
Another surprising fact is, only one of five students who understand that the interest paid on a savings account will be taxed. The results of this survey is the worst in a series of six tests during the last 11 years.
"Children do not understand much about finance. However, most parents do not understand how to educate their children to manage money, "said Executive Director Laura Levine JumpStart Coalition, as quoted by Time's online edition.
In the book The Intelligent Investor by Benjamin Graham mentioned several age levels of children when parents introduce money management in children. In children aged 9 years, studying financial governance begins with the provision of a weekly allowance amounting to half their age. The money is then allocated into three different piggy bank. First piggy bank is used for consumer spending, the second piggy bank for long-term savings such as buying an iPod or computer repair, and last used for charitable piggy bank.
With the allocation of money in three banks, the children will understand what the money is earmarked as well as provide an understanding of the importance of estimates of short-term goals and long term.
"I often talk to clients who successfully apply an understanding of the meaning of saving money. Undoubtedly, their children will be able to apply the habit of saving, "said Kelly Campell, financial planning experts from Campbell Wealth Management, Washington DC, USA.
Entering adolescence, suddenly, they will usually spend money without brakes. Countless amount of money should be spent by teenagers like to watch a concert of music, buy clothes, cell phones or game consoles.
In this phase, providing an understanding of financial management can help a child when a teenager is likely to consumptive. Environmental stresses and stimuli from the association is a challenge when implementing financial planning during ini. Use some piggy banks that adopted in the financial planning should be changed to bank accounts, ATM cards and deposits.
Teenagers also have to master the basics of economics, such as differences in definitions of stocks, bonds, and mutual funds. Teenagers should also be competent personal budget by considering a number of aspects such as price comparison and goods, make quick decisions and choose something useful.
"Teenagers will be easy to learn something by playing, learning directly, fun, and real," Lewis said Mendel, an expert financial planner from the University of Washington Business School, United States.
Age 18 is an early stage of a child to adulthood. The need at this age have been oriented to the future. For example, plans to enter college costs.
This age is the last chance for parents to direct the child in managing finances. Therefore, parents must make clear to the child to put back the priority of the needs and desires. Children who have 18 years of age will be faced with economic terms more complicated, as a penalty for delay, minimum balance in savings, or loan arrears.
A study revealed that the best indicator to determine the success of financial management for the future is the willingness of kids to delay gratification and spend money to strengthen the long-term savings.
If the parents still provide an allowance to children of this age, was love in amounts large enough to allow him to allocate limited funds in the budget form. When parents have to teach children early on about the differences in allocation of funds, especially the split between wants and needs, of course, the child will not experience the problems of financial terms.