Recently I attended the annual North Dakota Jump$tart Coalition annual conference. Jump$tart is an organization that promotes financial literacy through a network of volunteers. For the twelfth year in a row, Susan Beacham, founder of Money Savvy Generation and a financial literacy expert who has been featured on the Today Show and Dr. Phil, came to the annual conference to present. Her topic this year was “How to Think Like a Millionaire.” Her message to us was that anyone can be a millionaire and at just about any age. You just have to have the right attitudes to get you there. Here are her five tips for getting your kids (or yourself) to think like a millionaire:
1. Delay gratification
Self-control is the key to wealth. The good news for those of us who have kids who were not born with the ability to delay gratification is that self-control can be learned. So, help your child build their self-control muscle by teaching them early to use all four of the choices they have for money. Save regularly, spend wisely, put the “do” in donate and invest for your future needs and wants.
2. Work and earn money
Notice I did not say “get a job.” I said “work.” Encourage your kids to start working right away. Work for someone as a start. It’s a great way to get a paid for education. But don’t stop there. Encourage them to take advantage of the opportunity to work for themselves and be an entrepreneur.
3. Save money
Show your kids how to save and invest what they earn. Explain that they can invest in themselves by investing in their own business. Maybe that means getting a job to earn the dough to fund the blog they write, launch the website they create, or just to buy the lemons, sugar and cups they use to buy and sell lemonade. Maybe it means buying a share of stock in a company they believe in. Whatever makes the most sense for them, just save and invest and as a result, begin to understand the power of compound saving early and often.
4. Live well beneath your means
Parents – do not pay for everything. Give them a monthly allowance that they must budget to last through the month. Kids get much more creative when they are in charge of the bill. They get frugal and make tough choices. When you pay, they stop thinking. When they pay, they stop, think and make choices.
The only way you know where your money is going and why is to have a budget. Sit down with your child and talk about the expenses you want them to take charge of. Depending on the age of your child, that could be anything from the expenses they manage with their allowance to the expenses they earn money to cover when they are in high school and college.
Make it clear early on what expenses they will be responsible for and give them enough time to come up with a plan to cover those expenses. Those expenses become the “buckets” in their budget that they will need to allocate money to each month.
If you enjoyed these tips check out Susan Beacham’s website at http://www.susanbeacham.com. Also check out her Money Savvy Generation site with lots of products to help educate your children about money at http://www.msgen.com.