For some families the topic of money is taboo. This is especially true in families where money is not managed very well. Although it can occur in families that do a good job saving and investing as well. Often the parents do not want to worry their children, but rather want to provide everything for them. In many instances the children will receive nearly everything they want, but end up lacking the critical skill of money management.
You do not need to sit down and share every detail of your financial situation with your children. You may begin by simply taking the time to sit down and show your children a simple budget. You may just want to begin with a household budget. It is important that children, especially teenagers begin to learn how much everything costs. This will help prepare them for the expenses they will face once they reach adulthood.
It is also important to teach your children the value of a dollar. This can be done through chores around the house. You should also encourage your children to save for things that they want. It is important that they learn that work equals money, which equals the ability to purchase things. Often children do not learn this and begin to expect everything to continue on the way it was before they left home.
If you are comfortable with your investments you should sit down with your teenagers and explain to them the way that investing works. You should talk about the risks involved in the different types of investments, as well as the return of the investments. You may want to encourage your children to begin to invest their money. You may also have a contest in which they each pretend to invest a set amount in different markets and investments. You can track the rate of return on each investment. They can sell, buy or trade as often as they want. You should make sure you include any fees that they would have incurred for these transactions as well. At the end you can give out prizes according to how well they did. This may be cash or some other item. This will give your children a hands-on opportunity at how to invest, without the actual risk.
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