Most of us have kids in our lives – whether they are our own, our nieces and nephews, friends’ kids or the neighbours – and we are teaching them about money all the time.
Every time you make a financial decision or talk about money in front of a child, you are teaching them something. You could be making a transaction and quickly grabbing a few items down temptation isle or you could be moaning around the braai about how high rates, electricity and petrol have risen.These spoken and unspoken communication cues become embedded in young memories and shape the way that our children will manage their money.
If you have kids of your own, or perhaps you’d like to share this with friends that do, here are five points that you can actively choose to incorporate into your daily ins and outs to raise children who are wise in the way that they make, spend and keep their money!
1. SPEAK CONFIDENTLY AND OPENLY ABOUT YOUR MONEY VALUES
Whenever you and your partner have to talk about money in front of your kids, speak confidently and openly. This comes from knowing your acceptable common ground as a couple and knowing your money values.
When you are alone and the children are out of earshot, dedicate time to communicating confidently and openly with each other around your monthly budget, saving priorities and spending habits; these are your money values. Discuss the values that you believe are suitable for the children to hear, and those that are not: establish some healthy boundaries.
For example, you might be happy to discuss take-out options (and the costs) or a weekend excursion in front of your children, but you’re not happy to talk about what’s owing on the bond. If your children raise a topic that you both feel is not for their concern, be open with them and explain that there are financial responsibilities that they are not yet old enough to be concerned with and when they are, you’ll teach them.
If you are confident that you know where you partner stands on these issues, you will be able to be more confident to talk about money in front of your kids.
2. BE GENEROUS
Generosity is always a wonderful way to give back and be responsible with a portion of your income. When your children see you being generous with those outside of the family, they will be more likely to be generous too – and not only with money!
3. ASK THEIR OPINIONS
This follows on from point one… and only really works well when you already have established boundaries.To use the same example of take-out ordering, ask your kids what they would like within a certain price range. This helps them to look at a menu and see the prices that are there and develop a sense of responsibility. If they’re under 12 they’ll probably order from the kiddies menu, but at least they’re playing a role in the family’s purchasing decisions and you are forming the early money steps already!
4. TEACH THEM TO BUDGET
Giving your children an allowance (weekly or monthly) or pocket money is a fantastic way to teach them about income. Many of my clients expect their children to perform chores for their pocket money, which again re-enforces the concept of remunerative income and prepares them for responsible adulthood.
Once you have a system in place, let your kids know exactly what they would need to pay for and then ask them to set some financial goals. Perhaps it’s a new computer game or an item of clothing that they would need to save for. Teach them how to forecast their income to determine how much work needs to be done in order to earn the money that they need for their goal purchase.
For example, if you give your child R30 for washing the car and she wants a R300 pair of shoes, show her that she will need to wash the car 10 times in order to save enough. If the goal seems too unreasonable, you could always offer to pay for half if they save half themselves.
5. NEVER BE NEGATIVE ABOUT MONEY
When we are overwhelmed with bills at the end of the month, it’s too easy to speak and behave negatively around even the smallest of costs. Try and make it a priority to always be positive when you speak about money in front of your children. If you don’t have the money now, tell them to keep the idea and that you might need to wait a little.
Here’s a great website with fun games and activities to get even more involved with teaching your children about money!
Remember, parenting is never easy, even at the best of times. Don’t be too hard on yourself or your kids if things don’t always go according to plan!