There is only one “Sage of Omaha”, but when Warren Buffett offers some of his priceless financial pearls of wisdom it makes sense to sit up and take notice, meaning you can at least replicate his money methods even if you don’t have anything like the same amount of money to work with.
Learning how someone like Warren Buffett made his billions can often guide you towards a better financial future yourself, and they wouldn’t be bad tips to pass onto your kids too.
Here is a look at how to incorporate some of the “sage’s” financial tips into important lessons you can teach your kids about money. Including why it is so vital to start them early on the right path, showing them the value of money, plus pointers on when and how to give the lessons on money they will need.
Start the financial lessons early for a better financial future
Far too many kids reach an adult age without having any real understanding or concept of money and the role it plays in our lives, and that can often handicap their ability to get on and could even lead them to make some avoidable mistakes with their money.
Most parents are acutely aware of how important it is to teach their children about money and how to manage it successfully, but it often seems that they wait until their son or daughter has reached their teens before having any sort of meaningful conversation about financial matters.
Warren Buffett is so passionate about the need to teach kids from an early age about money, he has even created a kids Secret Millionaires Club to provide some answers to some of the big questions about cash and how to handle it.
The cartoon-style webisodes are well worth watching as they break down the basics into a language and format that is designed to connect with kids. It features lessons on credit cards, dealing with debt, and all sorts of other key topics and issues that kids would do well to know before they get to that point in their life.
The fact that Buffett started getting financial lessons from his father when he was just six should be a pointer to the fact that early insights can stay with you, and help you be more confident and savvy about money as you get older.
The value of money
If you want to talk to your kids about finances and give them a basic grounding from an early age, a good starting point would be to demonstrate to them how everything costs money.
Showing them how much physical cash you need to buy the groceries will teach them the value of money. You could also find King of Kash here and show them how loans work and what interest payments mean when you borrow cash from someone.
How you talk to your children and how you demonstrate the various aspects of money and how to spend it and use it, will need to be adjusted for their age so that they can get a good understanding without getting too confused, but there is always a way to deliver the lesson.
If you have young kids who are still in elementary or even kindergarten, a piggy bank is a great way of getting them started in the savings habit.
If they have a toy or other item that they really want, show them how to save for it over a period of time by putting any money they get into a jar. This will really teach them the value of money from an early age and lets them appreciate the true cost when they finally have enough saved to go and buy it.
Their own responsibility
By the time your kids are teens it would be a good idea to get them their own bank account so that they can get used to using a bank card to pay for things and start budgeting their money.
It would also be a sound strategy to teach them about the benefits and dangers of credit cards so that when they turn 18 they have more chance of being savvy with their use of credit and choices.
Teaching your kids about money is an investment in their future and it is better that you tell them the facts, including the mistakes you might have made, rather than let them find out.
They might not accumulate as much cash as Mr. Buffett but if they show some of his financial sense you will have done a good job raising them to be financially smart.