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One of the interesting things about how we spend money today is that a lot of it never actually passes through our hands. Whether you use your contactless card in a store, buy something online, or use a voucher, you are not actually handling cash. With only 8% of all the money in the world being physical, the rest simply exists as numbers on a series of computers. This is frightening in one way because it will affect how people spend and how their children grow up thinking about money. Making smart financial decisions relies on an understanding that money has real value. Its relative worth changes on the markets each day and foreign currencies strengthen or become weaker. But in terms of actual purchasing power, money is one of those things that you should teach your children about. In fact, one author and public speaker, Adam Carroll, did an experiment with his children where he replaced their monopoly money with $10,000 in real cash. This changed the way they played because the game had ceased to be abstract and had taken on real life consequences. This is especially important because one day your children will take out a loan for a car, or agree to a massive mortgage so that they can buy their first home. If they make a bad decision, it could seriously affect their life. In any case, making these transactions cheaper is always good. Here are a few ways of doing it:
When it comes to buying a car, it is a good opportunity to teach your teenager about the value of the money that they will spend on the car. They are not cheap after all, and with the cost of insurance increasing beyond the rate of inflation, it is becoming more expensive. If they want to keep these costs down as much as they can, you can tell them not to modify their car. Research has found that putting a turbo engine in your car can raise the cost of insurance by as much as 132%. Putting decals and badges on the car will see a bump of 22% alone. However, if you tell your child that they need to get a job and pay for all or half of the cost of the car, when they get it, they will appreciate it more. If they do find that they struggle to find the cash, especially after they have taken out the loan, they may want to consult an auto loan refinance rates comparison website. It is not an ideal situation, but learning from one’s mistakes is often effective.
Getting a mortgage is obviously another massive decision. Helping your child involves teaching them all of the things that they need to prepare in order to have the best chances of being met with approval. If they have any debts that they did not pay off, it will mean that their credit rating is not that good. Working with them to pay off their obligations is the best first step. You should tell them that registering on the electoral roll is not only part of their civic duty, it will help them get a mortgage too.
