02 Nov Set The Example
Set the example for your children
Students of Global Oak Tree Scholars (GOTS) are given the keys to be financially independent via its FinancialSmart programme but parents still play an important role in nurturing their children’s financial targets.
One way of setting a good example for your child is by getting your priorities right. It is important to list down the things you need and the things you want and this applies to your goals and expenses.
GOTS’ FinancialSmart programme teaches scholars this but seeing their parents practising it in real life will reinforce the lesson.
This means not having excessive debts, prioritising your purchases, setting a budget and saving money for retirement and rainy days.
Here are three other ways your habits can help a child learn about financial literacy:
* Document your spending
You know how much you earn but explaining where the money has gone is a different matter. Keep track of it by documenting your expenditure, even for the smallest of purchases.
If you give your child an allowance, ask him or her to keep track of where the money is going.
At the end of the month, sit them down and examine how it was spent. Talking to your children and explaining the value of money is a good way to teach them about finance.
* Start saving early
Encourage your children to save by discussing financial goal-setting. When a teenager wants to buy something, make him or her work for it and use the money they save to purchase these items.
Tiffany Aliche, founder of CLD Financial Life LLC, says: “When young people save for something, it changes their thinking about how they spend their money.”
Always remember, the sooner they start, the easier it is to reach their long-term financial goals.
* How to use credit cards
Some parents give their teenagers credit cards but do not teach them how to use it.
Set the example by only using your card for emergency purchases or if you use it frequently, pay in full to avoid interest charges.
Explain how much accumulated debt they could incur if they do not settle their balance in full each month.
To learn more about GOTS and its FinancialSmart programme, log on to https://www.gots.edu.my/