How Nobel Prize Winner in Economics Teaches His Kids About Money

Harry Markowitz is an American economist who won the Nobel Prize in Economics in 1990 and the John von Neumann Prize in 1989. Markowitz is a university professor of finance. He is also a member of the advisory board of Personal Capital, a company that has developed innovative solutions to help millions of Americans achieve their retirement goals and better manage their personal finances.

Markowitz is also a father. That means at home, with four young children, he faces the same challenge every parent faces: teaching his kids about money.

According to published information, Mr. Harry Markowitz often gives his children an allowance every time his family goes out somewhere, so that they learn how to spend their money.

To teach his children about money, every time they go out, he gives them an allowance so they can learn how to spend the money they have. Illustration photo

When asked how best to teach children about finances, Markowitz said teaching them about budget limitations is the most important: "The only thing I taught my kids about finances when they were growing up was to give them an allowance but they couldn't buy everything they wanted. Through that lesson, they will understand the value of money."

For example, when the family goes on a trip somewhere, he gives each child a certain amount of money, which they can use to shop at toy stores and souvenir shops. If the children are not used to budgeting, they will buy the most expensive thing in the store. However, because his children have been taught that his budget is limited, they will think carefully about what they buy.

"Learning to live within your means is a valuable lesson. It's a lesson that many people still have to learn as adults," the father said.

Why should we teach children about money early?

Former German Chancellor Angela Merkel said: "Moneyeducation is a compulsory course in life and is at the heart of children's education, just as money is at the heart of the family."

Japanese-American businessman Robert Kiyosaki, author of "Rich Dad, Poor Dad" said: "If you cannot teach your children about money, someone else will replace you later, such as creditors, police, and even scammers. If you let these people educate your children about finance, I'm afraid you and your children will pay a higher price."

Learning how to spend money is a mandatory course in a child's life. Illustration photo

It is never too early to teach your child about money. As children grow up, a lack of proper awareness about money can cause them to not fully understand the meaning of money, not know how to use money, and easily make mistakes.

American billionaire John D. Rockefeller once said that the children in his family, starting at the age of 6, would be given a fixed weekly allowance, which was completely under their control. However, the children had to record every penny they spent on what their parents checked. In the process, the children learned how to spend, save and manage money from an early age, as well as train their willpower and ability to delay gratification. Today, the John D. Rockefeller family has maintained its wealth for 6 generations.

In fact, children who have a correct view of money from an early age will know how to resolve the relationship between desire and ability, and live their own lives within the allowed limits. Such children will be more likely to succeed in the future than children who do not know how to spend money.

Learning how to use money is the most valuable lifelong asset that parents can leave to their children. A person's attitude towards money management reflects their ability to control and plan for an independent life in the future. Therefore, instead of teaching children to work hard to save money, it is better to teach them how to spend money properly.

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Source: https://giadinh.suckhoedoisong.vn/cach-nguoi-doat-giai-nobel-kinh-te-day-con-quan-ly-tien-bac-khac-biet-the-nay-bao-sao-con-lon-len-de-giau-co-172240306161700297.htm