Finance
2 Ways To Ensure Your Kid Makes Good Financial Decisions—By A Psychologist
In an age where Instagram posts flaunt the latest luxury fashion trends, TikTok videos showcase lavish vacations and influencers endorse expensive gadgets, children are bombarded with a relentless stream of materialistic messaging. This is often coupled with thousands of “finance bros” on every corner of the internet promoting their latest “get rich quick” scheme.
Consequently, social media has bred a culture of instant gratification and conspicuous consumption, making it more important than ever for parents to teach their children how to build a healthy relationship with money.
Financial literacy and budgeting are life skills that significantly impact an individual’s psychological well-being and overall quality of life. Teaching children about money management from an early age can contribute positively to their psychological development and financial success as adults.
Here are two reasons why financial literacy can set your child up for success
1. Financial Literacy Builds Character
Teaching children to save for desired items helps develop the ability to delay gratification. They learn that their patience will be rewarded by gradually achieving financial goals rather than by impulse buying. This process helps them understand that immediate desires can be managed and investing in long-term goals is deeply beneficial.
Research shows that delaying gratification can positively influence financial decisions and curb risk-taking behavior, encouraging individuals to exercise restraint and avoid debt.
Additionally, as children learn to save for things they want, they may develop a sense of self-confidence in their decision-making abilities. This can translate to other areas of their lives, such as academics and personal goal-setting, boosting their self-image and overall psychological well-being.
2. Financial Literacy Shapes Financial Well-Being
Skills like budgeting foster a sense of responsibility. When kids learn to create and adhere to a budget, they gain insight into making informed decisions about their spending. This process instills accountability as they ensure that their expenditures align with their financial plans.
According to a 2021 study published in Financial Counseling and Planning, spending habits and attitudes around money management formed in childhood also significantly impact adult financial behavior. In other words, the earlier you start discussing budgeting in your home, the higher your child’s chance of becoming a financially responsible adult.
Here are three techniques to equip kids with the knowledge and skills to confidently navigate their financial futures:
- Model responsible behavior. Children often learn by observing the adults around them. By consistently demonstrating healthy financial habits—such as budgeting, saving and thoughtful spending—adults can set a strong example for children to emulate.
- Normalize financial literacy in everyday life. Consistency is key in helping children understand and internalize financial principles. Tailor these concepts to their developmental stage, gradually introducing more complex ideas as they grow. Regularly incorporate discussions about money into everyday life, whether through grocery shopping, budgeting for family outings or discussing the value of work.
- Provide opportunities for experiential learning. Hands-on experience is crucial for reinforcing financial lessons. Providing children with real-life scenarios—such as managing a small allowance, saving for a specific item or participating in family budgeting decisions—allows them to practice financial skills in a safe environment.
Children develop a sense of responsibility, independence, critical thinking and problem-solving skills as they learn to manage their resources wisely, weigh options, anticipate consequences and make informed decisions about their finances. This can reduce financial stress as an adult, contribute to better financial decision-making and create a stronger sense of financial security throughout their lives.
Do you think your spending habits could be affecting your child’s financial mindset? Take this test to learn more: Excessive Buying Scale
Finance
The stockmarket rout may not be over
For a while on August 5th things were looking awful. During the Asian trading session Japan’s benchmark Topix share index had fallen by 12%, marking its worst day since 1987. Stock prices in South Korea and Taiwan had tanked by 9% and 8% respectively, and European markets were falling. Before trading began in America, the VIX index, which measures how wildly traders expect share prices to swing, was at a level it had only reached early in the covid-19 pandemic and after Lehman Brothers collapsed in 2008. Ominously, though gold is usually a hedge against chaos, its price was falling—suggesting that investors might be selling assets they would rather hold on to in order to stay afloat. The previous week’s rout in global markets seemed to be spiralling into a full-blown crisis.
Finance
Stocks look for recovery, Uber, Caterpillar report: Yahoo Finance
US markets (^DJI, ^IXIC, ^GSPC) are still searching for recovery this morning following Wall Street’s worst day in over two years. The selling was part of a global sell-off, which saw Japanese stocks suffer their worst day since the 1987 crash. The market turmoil comes amid growing fears of a recession among investors. On the earnings front, we are set to hear from top names, including Uber (UBER) and Caterpillar (CAT), before the market opens. After the close, we will hear from Rivian, Reddit, and Airbnb. Yahoo Finance’s trending tickers include Palantir (PLTR), Lucid (LCID), and Cassava Sciences (SAVA).
9:20 a.m. ET Aaron Dunn, Morgan Stanley Senior Equity Portfolio Manager
10:15 a.m. ET Chris Watling, Longview Economics Global Economist CEO & Chief Market
10:50 a.m. ET Leslie Feinzaig, VCs for Kamala Founder
11:10 a.m. ET Dan Sullivan, Edgewell Personal Care CFO
11:25 a.m. ET Stephen Yalof, Tanger CEO
Finance
Japanese prime minister urges caution in judging market's sharp moves By Reuters
By Makiko Yamazaki and Satoshi Sugiyama
TOKYO (Reuters) -Japanese Prime Minister Fumio Kishida said on Tuesday it was important to make calm judgements about the volatile market situation, with stock prices experiencing whiplash.
The stock index soared more than 8% early on Tuesday in a relief rally after plummeting 12.4% in its worst sell-off since the 1987 Black Monday crash.
Speaking to reporters in Hiroshima, Kishida said the government will continue to promote economic and fiscal management while working closely with the Bank of Japan.
He also shared an optimistic outlook for the world’s fourth largest economy, citing factors like the first rise in inflation-adjusted real wages in more than two years in June.
“We recognise the Japanese economy continues to make a strong transition to a new stage,” Kishida said.
Japanese Finance Minister Shunichi Suzuki gave similar remarks earlier on Tuesday, saying the government would monitor and analyse financial market moves and work closely with relevant authorities.
“It’s important to realise resilient economic growth while responding to changes in front of us,” Suzuki said.
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