According to US billionaire, Warren Buffet, his dad was his greatest financial inspiration. Widely regarded as the most successful investor of the 21st century, the business magnate and philanthropist recently highlighted in an article his thoughts behind his success.
“My dad was my greatest inspiration. He was my hero when I was six and he is still my hero now. He is an inspiration to me in every way. What I learned at an early age from him was to have the right habits early. Savings was an important lesson he taught…”
Buffett goes on to explain “parents need to start teaching kids about the importance of managing money at an early age.”
Buffet’s message to parents is straightforward: teach your children good financial habits at an early age. It’s a simple yet effective message and we can’t think of anyone more financially savvy to dispense this advice.
While Buffet certainly isn’t calling for parents to mould their children into mini-Buffets, who himself bought his first stock at the tender age of eleven, he is however stressing the importance of teaching the basics of money management.
And we couldn't agree more.
With Buffet’s advice in mind, here are four simple guiding principles to get you started:
- Lead by example: It’s one thing to teach a particular lesson and do the complete opposite
- Baby steps: It’s a process that won’t happen overnight so empower them to learn one good money habit or financial lesson at a time
- Let your children learn by doing: Let them make mistakes, through trial and error they will get there in the end and be better off for it. It’s better they do it now than in their adult year
- Save before you spend: Make sure they get into this good habit early on. Have your children set short and long term savings goals and work towards them, then let them go out and treat themselves (but always try to maintain some savings!)
And who knows? If your children develop good money skills and become confident managing it when they’re young, they might just well be a mini-Buffet in the making.