Are You Teaching Your Kids About Money?
You’ve been fantastic in your efforts to save money and budget your way to be closer to your dream of financial independence. Kudos to you !!
But are your kids aware of your hard work and consistent efforts ?
You strive to fulfill every wish of your child and take pride in being a great provider. The cute bunny teeth smiling faces prevent you from breaking the harsh reality of money to your kids at a young age, and you believe time will be the best teacher.
But NO! Whether your kids are adorable preschoolers or rebellious teens, the time for “money education” is NOW! Let’s face it, we all know they will never learn this in any lecture at school, just like you and me. We have often cursed our education system for the lack of guidance towards one of the most important matters of our time, so it’s about time we take matters in our own hands.
So where do you begin ? Start making your kid fill out your tax returns ? 😛 Now let’s not go that far!
Here’s 5 simple things to incorporate to ensure your kids know the value of money :
1. ” YOUR TOY AIN’T SPONSORED BY FISHER-PRICE “
So you went out there and got your child a beautiful piggy bank. You occasionally offer them some change money to watch them scurry back to their tiny piggy bank and carefully insert those coins. But do your kids know the value of every penny saved?
The next time you are out shopping and your kids need a Snickers bar, use the money from the pretty jars and let your kids pay for it. This simple act is a valuable lesson in understanding the importance of saving. As a kid I would often count all my money in my piggy bank, and the moment I had to purchase something using ‘my’ money, it was unacceptable. This small reality check is what it takes to learn that even a tiny candy bar costs money.
Notice the reluctance of spending and eagerness to save the next time you ask them to spend from those tiny jars.
2. XBOX OR THE SUMMER AEROMODELLING CLASS ?
Are you allowing your kids to weigh their decisions?
Each time I would throw a tantrum for the latest video games or a new toy in the market, my parents would lay out 2 options for me to choose. Do I want to play the video game and forget it exists in a few days, or do I wish to enroll in the aeromodelling class during summer and learn about airplanes ?
Well, there were times when I would get both options and be the happiest boy, but making a decision was the learning point. It showed me the difference between instant and delayed gratification. Understanding the opportunity cost is essential for kids in order to save them from making impulse purchases when they are older. Don’t give in to every demand, but instead show them alternative options to enable better decision making.
“A bargain ain’t a bargain unless it’s something you need.” ∼ Sidney Carroll
3. DEBT TRAP
” US Credit Card Debt crosses $1 Trillion ! “
No, you don’t have to throw these incomprehensible numbers in your kids faces to help them understand the negative impacts of debt. Start small, and show them how debt can affect one’s livelihood in various ways.
For example, state the importance of having an attitude to avoid borrowing at all costs. And if at all there is a need to borrow, emphasize the need to give it back at the earliest. Whether it is a board game your kid borrowed or some money, teach them by instilling these principles. You do not have to get into the complicated mathematics if all it takes is teaching a simple principle of living.
Like my father always said ” Life on borrowing doesn’t last very long “
4. POCKET MONEY
You’ve learned the value of money the hard way, but simply give away a weekly allowance to your kids because that’s how everyone’s doing it these days. You really think your kid will learn the importance of hard work with free allowance?
Cut the free allowance, and introduce the idea of working for an allowance instead. This will also reduce their “screen time” due to the unending involvement with digital devices. It takes work to save and earn money, and it is these principles that your kids will value the most when they grow up.
Lastly and most importantly …
5. ROLE MODEL
Whatever I have learnt about money is through my parents and their way of living. Living frugally does not come naturally, but is a product of one’s environment. Are you setting the right example so your kids can aspire to be like you ?
Ask yourself the following questions:
Do your kids find you budgeting your expenses ? Are you teaching them how to be satisfied with minimalism ? Do you state the importance of giving back ?
It does not take long serious discussions to help your kids learn about money, but simple lifestyle choices that go a long way. If you have any personal stories and ideas to share, I would love to learn from them through your comments.
Be Frugal, Be Smart, Be Rich!