Warren Buffet, the legendary Oracle of Omaha and the greatest investor of our time has given numerous pieces of advice over the years about investment and financial responsibility which can be applied not just to businesses but also to every situation of life.
The business magnate is one person who deeply understands the importance of teaching kids about money. It is in this regard, that Nairametrics taught it imperative to collate what he thinks parents can teach their kids about money and how he has taught his own kids over the years.
The following tips illustrate how Warren Buffet thinks kids should be taught about money.
- Start early: According to Buffet, the biggest mistake parents make when teaching their kids about money is that they do not start early. He said parents usually wait until their kids are in their teens before they start talking about managing money instead of starting when their kids are in preschool. He made it known that it is best to instil financial habits in your kids at an early age as it will help them grow and advance early in life.
- Saving money: The billionaire was quoted saying, “My dad was my greatest inspiration, what I learned at an early age from him was to have the right habits early. Savings was an important lesson he taught me.” He acknowledged the importance of helping kids learn about money and to understand the differences between wants and needs so that they will be able to split their savings and their spending.
- How to differentiate between price and value: Buffet was keen on helping kids understand the difference between price and value. Kids will rather want a cool brand of shoes or gadget than a similar item for a not so cool brand at a lesser price. Buffet advised that you help kids understand the different ways advertisers get us to buy their services or products, as well as how to tell what is and what isn’t worth paying for.
- How to make good decisions: The renowned investor suggested modelling good decision-making skills and talking to your kids about your decisions as you make them. This will help them think about how different choices impact future outcomes. For instance, there is a new video game they want to buy. Ask them whether they really need it and if they do to either plan towards it by saving or forgo it and manage their previous one.