For many families in the US, speaking about money with their kids is still a taboo. The adults make money, the kids ask for them to use them and that is the end of the story. Financial experts are of the opinion that understanding credit and consumerism is equally important for the adults as well as for the kids. Not raising the financial consciousness among the kids may make them ignorant about their finances and this may lead them to fall deep into the debt cycle. Though the debt reduction companies are there to assist you in coming out of debt, yet it is always better to take certain steps to stay sure about your finances. Educating, empowering and motivating children to become investors and savers are necessary to increase the number of financially responsible citizens in the US. Have a look at some steps that you may take in order to teach your kids about finance.

1. Communicate about the concerns of money: You’re not the only person to earn and they are not only responsible for spending what you earn. They have all rights to know about the importance and significance of money in our lives. They must know why it is important to save money and make it grow. They must also know the significance of spending money wisely so as to make it sure that they have enough funds for the near future.
2. They should be taught the difference between needs and wants: Unless you teach your kids about the difference between the needs and the wants, they can never make good spending decisions when they grow up. The present economy is already in a tumultuous position and you must make sure that you don’t concentrate more on getting things that you want rather than what you need. Needs are those things that are your basic necessities and therefore you must have enough money to buy such things. Instead of spending more money on your wants or those that you can do without, you must get your necessities.
3. Make them set financial goals: You must be giving them allowances in a particular month. Make sure you set some financial goals for them so that they know what it takes to achieving the goals and what the outcome is. Take them to the shop and make them buy their own things with their own money so that they know how to prioritize their expenses in order to make ends meet and reach their financial goals.
4. Open a bank account for them: You can even open a bank account for them for making them acquainted with the proceeding of a bank. Tell them why it is important to create a savings account and save money for the future. There can be any unforeseen financial urgency and if you don’t have enough money to support you, you may have to rush to companies for taking out loans. Taking out loans make you liable to repay the amount with interest rates and therefore, you must avoid such situations.

Apart from the ABCs of Do-Re-Mi, your kids must also know how the US economy works and what the importance of money within the economy is. They must also be acquainted with the debt reduction firms but also tell them it is always better to manage their own finances than rush to professional debt help companies.

Samantha Spuckler is a writer for various finance related Communities including Debt Consolidation Care. She is a financial writer by profession and has specialization in dealing with financial problems and its solutions.  She is well equipped to write articles on debt consolidation, savings, planning, frugality, debt settlement etc.

The fundamentals of financial competence are consisted in mastering one and the only rule:

It is necessary to understand the difference between assets and liabilities, and acquire assets.

According to Robert Kiyosaki, following this rule can help everybody become rich and relieve from financial difficulties.

This rule is the first and the only one. Perhaps it seems absurdly simple but a lot of people don’t understand how important it is. Many people have financial hardships just because they do not understand the difference between assets and liabilities.

Rich people acquire assets. Poor people and middle class buy liabilities and see them as assets.

What are assets and liabilities and what is the difference between them?

Asset is what yields money.

Liability is what takes money from you.

These are the fundamentals of financial competence – the basis of your future financial success. If you have known it, sorry. Otherwise, let me congratulate you on the fact that you have just acquired the fundamentals of funancial competence. However, the knowledge is death until you come it into you consciousness and start doing something. What assets you have and what you can create or acquire?

There is a principal, which is used by people who became rich. Robert Kiyosaki calls it “3 piggy banks”. Mark Allen mentions this principal in his book “The Millionaire Course“. I follow this principal now. And I am going to share the 3 piggy banks principal with you.

First of all, what are 3 piggy banks? One of them is savings. It is the money, which you save for yourself in order to use them somehow in future. You put away money for a rainy day.

The second piggy bank is your investments. Money that you invest in something: shares, bank deposit, mutual funds, bonds, business etc. You could invest in your education too. This piggy bank is for increasing money.

The third piggy bank is for donation and charity. It is the money that you give to someone. Giving away part of your income and supporting different charity organizations, we care of each other. This piggy bank encourages you to gain more in order to give more.

Ok, I have to create 3 piggy banks, right? Right. But how can I do it if I spent all money that I get or even more? It is easy, really. Turn on you consciousness and start with 10% decision using The Law of Accumulation. Continue save 10% of you income every month until you get used to do it. You have to make a habit. It is easy to live on 90% of you income, really. When the habit is formed, you could start create another piggy bank. And then the third one. This way I have come to “3 piggy bank” principal.

Other way is proposed by Robert Kiyosaki in his video program “60 Minutes to Getting Rich“. His advice is to start putting 1$ to each piggy bank. Is it easy? I am sure, everybody, who has desire, could do it. Then start putting 10$. 100$. 1000$. 10000$. And continue to increase, until you will save 10% of you income to each piggy bank.

Put regularly 10% of your income is the principal. Another principal, which will help you to do it, is called ‘pay yourself first’. It means, when you receive money, you have to pay to your piggy banks before you will pay to someone else – government, stores, salespersons etc. Pay yourself first.

The idea of 3 piggy banks is the following: rich is who saves a lot, but not who earns a lot. There are a lot of people on the Earth who have earn a lot of money but they spend a lot of money too. If they are fired one day, they could not manage with their expenses for a long time. 3 piggy banks principal allows you to create passive income which will cover your expenses, when you earnings instantly drop down. You keep, you invest, you give away – that is why you are rich.

If you apply 3 piggy banks principal in your life, you will gain great effect. You have real abundance in your life; you have all what you want. You feel good, because you give a lot of money to others. And you do what you love to do.