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| Our aim as parents is to pass onto our children all the accumulated knowledge and wisdom we've acquired over the years... |
First I want to address the baggage.
We all, whether we admit it or not, have our beliefs and misconceptions about money and finances in general that were passed onto us. Sometimes we commit the same mistakes as our parents, other times we learn from them, but the truth is, if you're reading this, you're probably in search of guidance. Also, you most likely don't want your children to make the same mistakes as you and end up in debt (like you).
Now, I am by no means an expert on the subject, I have made many mistakes regarding finances in the past. But one thing I always do is learn from mine and other people's mistakes. I have to say, researching for this article I've learned a lot of useful information and also many strategies that I don't regard as good ideas. I've also drawn from my own experience as a parent. And so, I've gathered all my knowledge on the matter and compacted it all in 10 bullet points.
You (and your partner) know what's best for your family, therefore you are welcome to adapt these tips to your situation and disagree and make suggestions of course!
You cannot teach something you don't know yourself. Our aim as parents is to pass onto our children all the accumulated knowledge and wisdom we've acquired over the years, albeit in bite-sized fashion, as to not overwhelm them. So perhaps the first task is to get educated about the subject yourself and combine it with past mistakes and lessons from your personal experiences.
I often hear people say "I wish I was younger but knew what I know now!" well... our children are way younger than we are, we've got the opportunity to 'be' younger as to speak, through them. One never knows everything about every topic on earth, sure, however, some things are worth learning so we pass it on. Money is quite a delicate subject, it's also an extremely important one. It influences the quality of life not only of our little ones but of future generations as well.
The best way to learn is to practice, so, start by giving them an allowance, however small.
How much you give your child and how often is entirely up to you and your partner. If you're not sure how much to give them, I found researching for this article, that as a guideline some parents give a £1 or £0.50 per year of their age per week. Usually on a Friday. When I started with my children I gave them less than that, but then, if they wanted something from the shop and they've been ''good'' at school and helpful around the home I would buy it. And I would say why they deserved it. With other things, they had to save patiently every week. At the beginning, they would have the money in their purse and change their mind if they saw something (usually slime) they wanted at the shops, I didn't stop them from making that mistake, but I would say something like ''It's your money to spend as you like, but remember if you buy that slime now, which will be dry in a week, you'll have to start saving again for that VR box'' or whatever they wanted to save for. That made them think twice before making impulse purchases. It's all a learning curve, so try what you feel works best for your family.
Here are my suggestions for teaching children the value of money in order to prepare them for financial success:
With time You'll find they'll ponder before purchasing anything. Don't you wish someone taught you that?
The best way to learn is to practice, so, start by giving them an allowance, however small.
How much you give your child and how often is entirely up to you and your partner. If you're not sure how much to give them, I found researching for this article, that as a guideline some parents give a £1 or £0.50 per year of their age per week. Usually on a Friday. When I started with my children I gave them less than that, but then, if they wanted something from the shop and they've been ''good'' at school and helpful around the home I would buy it. And I would say why they deserved it. With other things, they had to save patiently every week. At the beginning, they would have the money in their purse and change their mind if they saw something (usually slime) they wanted at the shops, I didn't stop them from making that mistake, but I would say something like ''It's your money to spend as you like, but remember if you buy that slime now, which will be dry in a week, you'll have to start saving again for that VR box'' or whatever they wanted to save for. That made them think twice before making impulse purchases. It's all a learning curve, so try what you feel works best for your family.
Here are my suggestions for teaching children the value of money in order to prepare them for financial success:
- 1 Consistency is key.
- 2 Make it playful.
- 3 Allocate the money.
- 4 Let them make mistakes.
With time You'll find they'll ponder before purchasing anything. Don't you wish someone taught you that?
- 5 Compensate them for extra work.
This teaches them that if they want more money they need to put in an extra effort.
- 6 Money is not just for things.
- 7 Exercising patience.
Whether it's a pair of cool trainers or the latest electronic gadget, children should be encouraged to save up for those luxury items that they want. I, personally don't believe in forcing them, you don't want to attach a negative connotation to the act of saving, but instead show them how much fun it can be, to find they are getting closer to having that shiny guitar in their hands! Help them with a saving plan, setting goals and perhaps offering more money in return for extra work. Or maybe they should sell a few items they don't need in a car boot sale (or a yard sale if you're in North America), set up a business like the classic lemonade stand or sweep leaves off of neighbours' driveways or gardens. Encourage them to use their imagination and help them brainstorm. Be an ally.
- 8 Speak about investment and other forms of multiplying money.
Depending on your child's age you can explain this in the simplest of terms, or really provide them with a bit more detailed information. A simple way to put it to young children is (for example) that if they put money into an account and don't use it for a whole year, by the end of the year the bank will "give" them more money. Or, let's say that they buy £5 worth of cake ingredients, they make 5 cakes, each cake is cut into 7 slices, if each slice is sold at £1, you'll end up with £35, minus the £5 pounds invested, £30. These are just examples that could give them a general perception of how money works.
This cake example can be put into practice for a charity stand or a school funds raise, that would further set the understanding in their minds.
- 9 Explain how ''invisible'' money works.
Let's face it, not many of us walk around with a wallet full of cash anymore. Most of our payments are made electronically, and this can give children the impression that paying for things is as easy as swiping a card. So tell them, even if with role play, that the card you pay with has a limit amount of money in it and that you must manage it just as if you had the physical cash in your hands. Maybe take your child with you to the cash machine, withdraw some money and show the figures on the statement. This helps them understand that when you pay, money is actually deducted from your account.
- 10 The difference between wanting and needing.
Now, this can be a tricky one depending on the level of understanding of a particular child. The important thing to bear in mind is, children are hearing about so many things for the first time in their lives. And sometimes we may send mixed messages, so it is important to be consistent in our communications with them. A very young child may not fully grasp the concept of wanting something versus needing it. When we really want something, even for us adults, it feels as if we need them but we can't go around "needing" everything and sometimes we have to choose. So help them weigh in the pros and cons of buying one item over another.
And finally, just a little bit of a last word on this topic...
Be mindful when making comments about money or buying around children. They learn more by watching than by being told.
Listen to your child, they have this wonderful ability to come up with things that we never thought about, give it a good thought before disregarding their ideas so immediately, and explain why you don't think it's a good idea, they might reply with a better idea. It will make them feel as though they have a voice and a say.
When you discuss past mistakes, such as the child spending all their money on sweets or other "silly" things, try to not use an accusative tone. This will only make the child feel guilty and associate money with negativity and there's no need for that. Children are young (duh!) they have time to absorb all this information, they don't need to learn everything in one day. Make it digestible.
You are probably going to make mistakes as we all do, just make sure you learn from them and teach your child the better version. You got this ;)
Thanks so much for stopping by.
Much love,
Thanks so much for stopping by.
Much love,
Rita
- Saturday, January 12, 2019
- 0 Comments
