TomorrowMakers

When asked what the billionaire tycoon believes is the largest error parents make when educating their children about finance, here’s what Warren Buffet have to say.

Warren Buffett discusses mistakes parents make in educating their children.

What does Warren Buffet have to say?

Given his renowned commercial skill, Warren Buffett's financial advice would be valuable to heed. Approaching the 91-year-old CEO of Berkshire Hathaway for advice on how to teach youngsters about money, he responded that it's never too early to begin educating children about financial budgeting and planning.

Warren Buffet stated in an interview, "My father is an epitome of this. He advised me that it is best to develop excellent habits as early as possible. He imparted to me the value of saving.” According to Buffett, the majority of parents are aware of the value of teaching their children about financial planning, but there is still a difference between learning and application. Even after being aware of all of this, many parents still neglect it.

What do the studies imply?

  • To Buffett's statement, scientists have discovered that by the age of three, our brains have developed by 80%.
  • According to a Cambridge University study, between the ages of 3 and 4, children may already understand the fundamentals of money. Additionally, basic ideas on long-term financial behaviours will often have evolved by the age of 7.
  • According to recent surveys, 30% of parents started teaching their children about money when they were 15 or more, while 14% indicated they never did. 

Also Read: Investment strategies for beginners from Warren Buffet 

Here’s how you can teach your children from a young age:

  • Flexible Thinking:

The purpose of this lesson on flexible thinking is to inspire your children to persist even if something doesn't work this time. When people encounter upcoming financial difficulties, having the capacity to think freely and unconventionally will be helpful.

  • How to initiate saving money?

Teach your children the distinction between desires and necessities so they can learn how to manage their finances.

  • How to distinguish between value and price?

We've been all responsible of spending more money on a trendy brand of apparel or a high-end device when a comparable model that's just as good could have been purchased for less money. The purpose of teaching is to educate children on how advertisers persuade us to purchase their goods or services and also how to determine what is and isn't worth the money.

  • How to make wise decisions?

The secret to making wise decisions is to consider how various options may affect the course of events in the future.

Also Read: When is it the best time to teach children about Money?