As a parent, we all need to spend time teaching our kids about the importance of money and how to spend it wisely. It may not be easy to teach kids how to be financially responsible from an early age, but you can commit if you adhere to a very strict process. In a world of reckless lending, financial bankruptcy, and government bailouts, it all comes down to the internet’s most famous currency- Bitcoin. Yes Bitcoin the grand daddy of them all. But what about all those parents who have never heard of Bitcoin or digital currencies? Well, you are ahead of the curve if start now to teach your child about digital literacy. Surprisingly it's not that far a stretch. Take the time to ask your child if they are old enough to have played any simulation of video games and in all likelihood they will already have had some exposure to trading, buying or selling tokens for game credits. Who is teaching who you might ask?
Talking to your kids about bitcoin can teach them valuable lessons about money management. In the long-run, this could help them manage their money with a lot more responsibility. Sadly, cryptocurrency is a domain that is so new that only the savviest can understand. You can change that by starting now with your children or young adults. However, if you do nothing and wait 10 years from now today’s 15-year old will know everything there is about trading bitcoin. As prudent parents though we can make sure our children learn about this the correct way and make fewer possible mistakes along the way. To make sure they make sensible choices, you should talk to them about bitcoin as soon as possible.
The present generation will grow up aware of what bitcoin is. At some point, they’ll develop the capacity to understand what virtual money is, and how it can be used as fiat money. The idea of virtual cash holds in a virtual wallet is not the most concerning factor and in some cases presently it is not that new (kids use debit and credit cards). What’s important is that kids learn that trading bitcoin is risky. Risk comes in the form of not only the volatility but the possibility of falling wayward to a scam or some other sorted mis-direction. Focus on teaching your kids the fundamentals of money management, debt avoidance, and personality financial responsibility.
On the bright side, you can use the opportunity to teach kids about taking responsibility. Talk to them about the importance of being careful and paying close attention to the actions they take. Emphasize the benefits of a digital financial system, but make sure to highlight that the decisions they make are fundamental. Make sure they know the decision they make have consequences both good and bad.
One of bitcoin’s most famous logos – “be your own bank” – is reason enough to go digital on your finances; and teach your kids about it from a young age. However, with great financial liberty comes great responsibility. When you are in full control of your money, you are also in charge of safeguarding it. With conventional bank accounts, if you lose a password or username, it’s rather easy to regain access. But if you lose the key to your bitcoin wallet, chances to recover it are slim. Again don't sell your child short on understanding the digital part but the safe keeping part may differ.
Purchasing, selling, trading and saving Bitcoin can teach responsibility. Debt is something most everyone in today's world will incur. Debt is the all-in-one word that sums up today’s financial crisis (we need not look far to see the financial burden many of the worlds citizens carry on a daily and long term basis). The conventional financial system is broken, but successful because it depends on a supply called “the debt of the people”. The average consumer is directly affected by a wrong debt mentality. Many vendors allow you to buy things now, but pay for them later. This breeds a false sense of buy now pay later. What if you can’t?
Inevitably, while your kids will grow up they’ll learn at some point that they can buy things without paying for them on the spot. They will overlook the consequences involved because they’re driven by instinct. With bitcoin, the rules of the financial game change. To begin with, bitcoin is not debt. It is a reliable, stable source of currency (or is that commodity or is that security) that doesn’t depend on any third party, like a bank.
Because of bitcoin’s deflationary nature, people are encouraged to save their coins rather than spend or trade them at a lower price. Talk to your kids about the importance of saving bitcoins. Since the overall value of the digital currency is expected to grow because of a huge demand, toddlers and youth might get excited by the idea that saving will eventually pay off. The volatility of the crypto markets will teach youth in very quick fashion the highs and lows of investment. Rather than support a broken financial system and be unsure that your kids will grow up financially independent, it’s best to take precaution measures ahead of time.
In my next article we're going to take a closer look at Bitcoin and how to get started investing.
Credits to Jason Phillips
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