How to Teach Kids Money?  6 Methods used by Warren Buffett

How to teach kids about money? Here are 6 methods used by Warren Buffett. With all the big business deals and charities, you would think the billionaire CEO of Berkshire Hathaway won't have time to teach the next generation of investors. You are wrong! In 2011, Buffet helped create a children's animated series called The Secret Millionaires Club. He even voiced himself for the first few years. You may not have as legendary financial acumen as he is, but over the years Buffett has given parents a few key advice on how to teach their kids about money.  

1.It is never too early to really learn

When Buffett says start teaching financial skills early, he really means early. “Sometimes parents wait for their kids to reach puberty before they start talking about managing money - but the right time is when kids can start kindergarten,” he told CNBC. How would you teach a three-year-old financial literacy? Forget the stock market and start with the classics: Money doesn't grow in trees. You can explain to young children that spending isn't as easy as touching that card everywhere you go. Making money takes a lot of work, so you shouldn't spend it pointlessly.  

2.Teach the value of savings, even if it is $ 1

As soon as you are old enough to understand, start teaching your children the value of saving. Buffett was not wasting time teaching the kids at the Secret Millionaires Club about interest. "Saving money on a regular basis pays off," he says. "Save the money instead of spending it on soda that you don't really need. That money you save will earn you even more by generating interest for you." The lessons learned from cartoons only go so far - You have to provide them with their own savings accounts and debit cards. Some special apps even allow homework assignments, automatic deposit arrangements for pocket money. - Even invest the interest provided by the parent. That way, they can see how much money they are making and saving. But don't worry, you'll have full control over how much and where they can spend with the card.  

3.Be a role model

Your kids will gain some good and bad habits. Buffett points to his dad who shows him how to develop the right habits. "My dad was my biggest inspiration," Buffett said in an interview with CNBC in 2013. Said, “When i was six years old he was my hero and still is. It inspires me in every way. It was very important that he gave me the right habits at an early age." Would you like to be a heroic parent? Inspire your children by making smart financial decisions. This doesn't mean you have to be an expert investor, at least show your kids that you know how to keep the house tidy. This means above all to eliminate the troublesome debt accumulated. For example, if you are struggling with high interest rates, such as with credit cards, you may want to consider collecting all these debts under one loan at a much lower interest rate. You can find free online services online that will help you quickly compare different loan offers and make it easy to find the best prices.  

4.Distinguish needs from wants

An early and difficult lesson for children: You cannot have everything you want. In order for them to manage their money responsibly, you need to teach them that there is a significant difference between wants and needs. "Ask your kids to make a list of five or 10 things they want to buy," Buffett suggests in an interview with CNBC. Next, review each item with them and mark whether this is a need or a request, explaining why. Show your kids that when you shop for need or sometimes wants, you can make meaningful decisions at that stage too. For example, pricing is not the same for every store. With a free browser extension, Amazon, Target etc. While shopping on the platforms, you can instantly browse the prices offered by other vendors, and perhaps better.  

5. Increasing knowledge

Don't have all the answers? This is normal; successful people never stop learning. "Lifelong learning and the pursuit of self-education are important for every individual," says Buffett's voice in an episode of the Secret Millionaires Club. This may be good advice for parents, but it's even better advice for those just starting their educational journey. The Oracle of Omaha (Warren Buffet), who reads several newspapers every day, says, "What I always say is learning to learn. A course at this university could be by reading about innovations and new technologies. “Don't be afraid to keep learning,” he adds. Start by encouraging your children to pursue their hobbies, which could mean an after-school program or an activity that includes extra reading. The passion and dedication given to this knowledge is a counterpart in all areas of life, including financial conditions.  

6. Nurture their entrepreneurial spirit

It didn't take Buffet long to start improving his business skills. Long before Berkshire Hathaway, when he was only six, Buffet earned his first few cents by selling gum in the neighborhood. Seeing an opportunity to make even better profits, he continued to buy six packs of Coca-Cola for a quarter dollar, selling one for five cents. Your kid may never grow up to lead a multinational conglomerate, but encouraging them to see money-making opportunities will always be helpful on their long way to go. Even a lemonade stand will help learn lessons like problem solving, goal setting and sales. You may also want to consider creating some initial money for your child's future ventures using an automated investment app. Some apps even collect the leftovers of all the small purchases you make every day and put them into an investment account created for your child. When your child becomes an adult, he or she can take over the account and use the lessons taught to them to make it bigger. You may also want to consider opening a joint investment portfolio together when you reach a young age. Some online brokers even give new users free stocks when they sign up.     Source: https://finance.yahoo.com/ You may also be interested in: The Most Important Investment Lesson Taught by Jeff Bezos, TESLA and the ZOOM fact!