Teaching Your Children About Money
Many adults struggle throughout their lives dealing with issues such as saving for a car, a holiday, a house or putting money aside for their retirement. We read books, watch television programs, attend seminars and exhibitions, and seek professional advice in order to become more financially literate. So what about our kids? What are we teaching them about money? How are we teaching our children to save and what are we teaching them about the value of money in order to prepare them for their future?
Most parents teach their children how to read, how to count and share at an early age to embed skills and values that they will benefit from for their entire lives. As concerned parents and grandparents we all want the best for our children and grandchildren. That is why we should take responsibility for teaching our children the value of money and showing them how to save from an early age. So how do we teach our children about money and saving?
Children must understand that they have to work to buy the things they want. No work, no money! We as adults either work for our money or we have none. Children should also understand that if they do not do jobs or chores, they won’t earn any money. An important step for parents in teaching their children the value of money is avoiding the temptation to buy them everything they want.
Teach your children the value of setting goals. Adults set goals such as saving for their retirement or for their dream home. When children decide they want to buy something, we as parents need to teach them a simple 3-step process. Firstly, they need to learn how to set a goal; then they need to decide how they can achieve it; and most importantly we want to teach them to persist until they have achieved that goal. This is an extremely important process for your children to learn and understand.
Remember that they see you going to the ATM (Automatic Teller Machine) and withdrawing cash or they see you receiving cash via EFTPOS at the supermarket and to them money is this wonderful stuff that just comes spitting out of a machine whenever you want it. (If only it were that easy I hear you sigh!)
They also see the advertisements on television encouraging you to buy whatever you want on credit so that you can have it all now. As we all know, it’s not that easy – and the more we buy on credit the more it ends up costing us. We also know that many times we have bought things on impulse only to find later that we didn’t really want or need them. Worse still, if we’ve bought them on credit, the pain of having to continue paying for them lasts much longer that the short term pleasure we enjoyed when we first took possession.
The earlier we can teach our children responsible attitudes and behaviours around money, the better equipped they will be to deal with the constant bombardment they receive to continuously consume and spend their money rather than save it and invest it for a far more prosperous life. The sooner we teach our children to choose delayed gratification rather than the instant gratification promoted by our advertising driven, consumer society, the sooner they will learn to be masters of their money rather than being slaves to it.