…and how your relationship with you affects your money
Money plays a very integral part in our modern world, it’s true that you cannot do anything without interacting with money. Even a seemingly “free” trip to the beach involves a lot of transactions, whether you are aware of them or not.
Firstly, there’s the advertising that influences your chosen beach, the transport, lunch and the clothes you wear whilst there. Everything has a price tag associated with it. The important thing to keep in mind is that your relationship with yourself greatly influences your spending habits and earning potential.
What is Money?
Some people think money is just a currency, an exchange of value for one thing to get another. You exchange your time to earn a living, so you can buy food every day. But is that all money really is, an exchange of value between two people?
The straight answer is, no. You see, money is not just what it says it is worth on the bank note, it is worth much more than that. There are a whole lot of intangible things that come with money. The biggest of all of them is trust.
When someone exchanges money with you, the transaction is as much an exchange of trust as it is an exchange of value.
Money also represents a portion of time. We each spend part of our lives working to earn money, so the money that we make is a representation of time too.
What we think about ourselves and those around us, has a huge influence on our spending habits. Teaching our children to respect money is a very powerful lesson to learn early in life. Children who respect money, develop responsible spending habits and save much more than people who don’t have the same respect.
Those who have little respect for money, value it lowly and spend it freely – often on silly items and worthless junk. Whereas, children who are taught to respect money will carefully weigh up their buying decisions before making a purchase.
Why Respect Your Money?
Every person or group of individuals who earn money are obligated to manage their money in such a way as to maximize the benefits they receive. If you are the primary beneficiary of your money and investments, then it is solely up to you to ensure your money is working hard for you.
No one else is going to make sure that you’ve got enough cash to put food on the table. So if you squander your money on useless things, then you’ll be left homeless and hungry.
Teaching our children at a young age to think about their retirement can pay huge dividends in later years when their small nest egg has grown exponentially.
Adopting a Respect for Money Attitude
To ensure your child learns to respect money and therefore manages their money well throughout their lives, here’re our top tips:
- Set correct financial priorities
- Create and track a budget
- Put away for retirement
- Create an investment strategy
If you want to find out more about teaching your children to treat money with respect, then check out Fran Christie’s new book “101 Money Tips for Kids and Parents” here.