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One of the most important life lessons you can teach your child is the importance of money, which is something they’re never ever going to learn from school. The earlier you can influence them the better. There are many reasons why and how to make your child a millionaire. Whether they become a millionaire, billionaire or whatever level they achieve financially, it is important that they understand what it takes to become financially independent in life.
Teaching them how to manage it and how they can make it work for them will have a huge impact on their life in the future.
But not many parents are currently doing this for their children.
Not only does this mean that their child has little chance of becoming a millionaire, but this means another generation grows up with bad money habits and essentially becomes a victim of their own poor financial habits.
However, you can make sure that this doesn’t happen to your child by reading this article and implementing what we suggest to ensure that your child will grow up to have a healthy relationship with money, and one day become a self-made millionaire.
The best place to start is by making sure that your child understands the value of money at an early age.
Incorporating allowance is a great way to teach kids all kinds of money management lessons. However, make them earn it! Chores, good grades, being obedient, etc.
Tell them how much things cost – when making purchases, tell your kids the price of things. “This cereal is $3, this cereal is $4” and explain why you are making your choice.
Give them opportunities to make money other than an allowance – the age-old Lemonade Stand is still a great idea. This shows kids that earning money takes time and effort. For more ideas on how teens can make money, watch my detailed YouTube video below dedicated to this very topic.
Here is a link to the MyMoney.gov page for “Resources for Youth.” This page is packed full of fun websites, interactive finance games for your kids and so much more.
As part of this exercise with your kids please be sure to download my free monthly budget template and also watch my detailed video below on budgeting.
Greenlight is basically a debit card your child can use that you, the parents, manage. It is connected to your bank account so you can transfer money easily (and automatically) send rewards for completing chores, and you are even notified every time your child uses the card. Best of all, there is an accompanying app that your child can use to see the chores you expect them to do, set goals, and they can even get a card with their selfie on the front.
80% of parents who used this service reported feeling that their children learned more financial responsibility as a result of Greenlight. The app has a “spend, save, and give” section in the kid’s app. As your child earns money, they will be prompted to divide their money appropriately within these areas. As mentioned above, this teaches you to spend less than you earn and teaches healthy habits.
Parents can set controls in numerous ways.
1. ATM controls – set maximum amounts children can withdraw from an ATM at any time.
2. Store-specific controls – set maximum spending amounts at certain stores to reduce overspending.
3. Turn off or reactivate cards – if your child’s car is lost or stolen (or taken as a consequence), you can turn it off immediately from the app.
4. Set the interest rates (paid by you) to incentivize your children to save more.
• Round up savings option – there is a setting that sends all the extra change from purchases to the savings account.
• Referral bonuses – if you love Greenlight and refer it to other parents, you both get $10
• Direct deposit – teens with their own jobs can have their paychecks directly deposited to their Greenlight account.
• Chore reward – send your kids optional chores and if they complete them, the funds are directly transferred.
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With a lack of financial education for the most part in our society, Greenlight provides a platform that helps fill that void. Real-world lessons in financial responsibility Greenlight kids set their own goals, make tradeoff decisions and learn the power of saving. 89% of their parents said Greenlight has helped teach their children financial responsibility.
Instant gratification can steal the money out of your pocket faster than a masked guy robbing a bank; there is no way your child can become money smart if you let instant gratification plague their buying decisions.
Instead of using the money they’ve earned to make it work for them, by investing it into their own future, they spend it on useless junk that does nothing, but burns a hole in their pocket.
So, make sure they know all about instant gratification and how to resist it.
The most important part of any person’s character is understanding that they have responsibility for pretty much anything that happens to them; finances included.
This is a great thing for your child to learn when they’re young, as they can implement this attitude in their everyday school lives and help develop this understanding as soon as possible.
They can quickly learn to accept that there are things in life which they are responsible for, and if they do not own up and make a point of doing the correct thing to influence the outcome which they want, then they’re never going to get what they truly deserve.
Whether that’s getting the grades they need in school or making sure their investments payout as anticipated.
Although generally it’s expected that as a parent, you’ll be helping to cover their costs for college as well as a university if your child chooses this route, it would be a great learning lesson if you encourage your child to cover these costs too.
Not only will this help to reinforce some lessons you’ve taught them previously; such as the importance of money and how it can be used to help benefit one’s life.
It will also be a nice way for your child to get some real-world experience with earning money and putting it towards their future.
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If you’re thinking about college savings CollegeBacker is in my opinion the best platform for you. No other platform provides the simplicity, choices and options. Within as little as 5 mins you can have a tax-free growth investment plan in place. You can also have friends and family to directly contribute as well. Apply today if you’re planning on saving for college.
You can do all the teaching you want; ensuring that they understand what money is as well as how they should use it, but this can all blow up in your face if you’re not leading by example.
If you’re saying one thing and doing another, then your child is going to get confused as to what is actually best, especially since you’re their role model throughout their childhood.
They’re going to mimic whatever you’re doing whether you like it or not.
So, make sure you’re doing what you teach.
Here is a link to the FDIC’s page on “Money Smart For Young People.” It breaks things down to help you teach your kids about financial literacy broken down by different age groups.
To follow on from leading by example, it would also be best to show your child what they should be doing with their money.
Investing is a great way to show them how their time and money can work for them. Whether it is education, stocks, bonds, real estate or entrepreneurship, having your money work hard for you is critical for financial success.
Doing this whilst your child is there watching you will help influence them in the future, teaching them a valuable lesson whilst actually doing it in a practical way will also make sure you get the point across much easier.
Within the digital age, you can pretty much make money however you want to, whether that’s making videos on the internet or modeling the latest brands on an Instagram page.
For this reason, it is important to encourage your child to build on their hobbies and skills so that they can use them in the future to help make them a millionaire.
But remember, they should also be doing things that THEY enjoy, don’t make it all about the money.
You want to make sure they’re spending their waking moments doing things they love; considering them making money off these skills and hobbies as a bonus rather than the only reason.
As mentioned earlier, you can make money however you want to, from the comfort of your own home behind your computer screen.
Eventually, your child will need to get into the real world and negotiate things like contracts with their future employees, so they’re also going to need to understand basic public speaking skills on a one on one level as well as on a bigger scale.
All in all, there are many lessons that go into enabling your child to become a millionaire, whether it’s teaching them about the importance of money and how they spend it as well as how they should develop themselves to give them an edge over their competition.
Ultimately, you should be leading by example and encouraging them to do what they love so that they can earn the money they deserve whilst loving every moment of doing so.
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