In today’s fast-paced, money-driven world, one of the many things we need to train our kids in is how to deal with money. On the one hand, there are parents who treat money as something to be feared. For them, money is unmanageable. It’s about debt, burden, taxes, and the future. It’s all about “shoulds.”
On the other end of the spectrum are parents who spend as if there’s no tomorrow. It’s all about the wants. Our money mindsets as parents help shape how our children will take care of their money.
From a young age, we need to see them as future financial caretakers. The examples they see in us have to go hand-in-hand with what we teach. So before you teach what you preach to your kids about money, make sure that you are practising them.
Keep the following attitudes in mind to teach the corresponding money lesson at the appropriate age.
1. Money is an instrument.
Just like a pen is to a writer, or a calculator to a financial adviser, money is a tool every person uses to achieve certain things. And just like an instrument, we need to keep practicing good habits in using it to become better stewards of it. As we set our own examples in every stage of our kids’ development, we need to teach them appropriately as well.
At the toddler level, we can already start teaching our children about money being an instrument with toys such as piggy banks or cash registers. We can play pretend buying games by exchanging play money with play food, their toys, or books.
At the primary school level, chores can be assigned to them. Cleaning after themselves and their own room need not be paid, but helping out around the house may be. If they want extra toys or books, encourage them to save up for it. Teach them the difference between needs and wants. Start introducing them to simple budgeting. You may start looking at opening their savings account and involving them in maintaining it.
At the secondary level, encourage them to take part-time jobs. Build on what you’ve been teaching them, and don’t be afraid of exposing them to a higher amount than before. Talk to them about expenses in the house and how we work to provide for ourselves. They are expected to do so when they become older. Brainstorm with them about what kind of life they would like to live and how they intend to have it.
At the university level, guide them in the degree that they would like to specialise in, keeping in mind that this will be a stepping stone in achieving the life they want. How will their future degree aid them in getting the job they want? What extracurricular activities will provide them with the skills to be attractive potential job seekers when they graduate? Encourage them to continue with part-time work, if possible. Look into debit and credit cards and teach them how and when to use both. Take a look at our credit card comparisons to see which one matches your requirements.
At the young adult level, expose them to different bank instruments (loans, insurance, investments) to help them start thinking about ways to diversify their savings. Guide them in looking for work that will help them develop their skills. Remind them that it’s okay to spend as long as they are putting some away. They will need to revisit their goals to remind them where their savings will go in particular.
2. Enjoy using money, but use it wisely.
Armed with how to view and treat money, both from your example and instruction, show them that money is fun to use. Whether by saving for a rainy day (or a date with their special someone or a branded bag), money need not be seen for its lack.
When they plan the use of their money, spending doesn’t have to feel like too much of a high nor a depressing low. It is what it is. Sure, they’ll have fun, but it’ll be tempered by the fact that it was spent on something they thought of. There may also be times when they splurge. But again, they know that they can either earn the money that they spent back or just chalk the experience up to simply a lesson learnt.
Remember, consistency and communication are keys in any example we set for our kids. We’re not perfect, of course, but let them learn from our mistakes as well as our successes as we support them in theirs.