One of the best ways to build wealth for future generations is to teach your kids about financial literacy. One way is to start talking to your children about how you and your spouse can buy things that the family needs by working hard every day. Kids need to understand that wealth doesn't just fall into their laps and that they should make wise money decisions to grow wealth.
You can also teach your kids about financial literacy by having them sit down with you as you work on the budget. Show them the cost of specific bills each month and discuss ways they can assist in keeping the accounts manageable. For example, you can ask them to cut off all of the lights and any devices in their rooms when they're not using them. Here are other ways to get your kids excited about financial literacy!
Be the Example of Wealth Building
It would help if you showed your kids, by example, what wealth-building looks like for the family. If you operate a successful home-based business, talk with your kids about why you started the business and some of the struggles you endured to make it successful. Discuss the investment account you opened and how the stocks you own in several companies provide dividends that help the family grow wealth. You can even open a custodial brokerage account for your child and have them contribute any money received from chores or relatives into this account. By doing this, you're teaching your child how to prioritize wealth-building over spending money on frivolous things.
Discuss Wants vs. Needs
Many kids seem to want every toy, snack, and cool clothing they see on TV and in the stores. However, it's wise to teach them how to distinguish between wants and needs. For instance, your child might need new clothes for the summer, but the clothes don't need to come from the most expensive boutiques in town. Or maybe your child wants the latest Playstation game, but they don't need it immediately because the reality is they can probably wait until their birthday or Christmas to receive it.
Talk About Credit Card Usage
It would be best to discuss how credit cards work and the most responsible way to use them, such as the benefits and responsibilities of owning a credit card, as well as the consequences of credit card debt. Hopefully, these tips are one step in the right direction to help prepare your kids financially for adulthood.