As a child, money does not have the same value as it does in our adulthood. Children only think of money and finances in general when it comes to something they want or need – often tangible items like clothes, shoes, or that shiny new toy.
Perhaps we had the same ideals in our youth, until life showed us differently. Regardless of how we were raised or how specifically finances were (or weren't) talked about, it is important that we use what we know now and create an environment where the whole family can benefit – regardless of age.
Have open and honest conversations
In many households the topic of money was completely taboo for children and was classified as an "adult conversation". While we all understand that kids should be kids, that doesn't necessarily mean we should hold them back from these conversations.
Finances can be tailored to all age groups. In all honesty, you'd be surprised at how quickly they can get information. For example, if there are mistakes that you want to prevent your child from making mistakes (or at least creating awareness), use real-world experiences to paint the picture for them.
What patterns or behaviors did you get into when you were younger? What would you say to your younger self if you had the ability? Use these questions to make a list of things to talk about depending on your situation. You may not be able to fully grasp things but have the background knowledge you provide to generate better financial decision making skills.
Every moment is teachable
Since children are not responsible for paying bills, they are usually unaware of the consequences (good or bad) of things. If your little ones find it difficult to turn off lights when not in use, or turn off the water when brushing their teeth, make them aware. Explain to them that utility bills are not free and that every little bit helps. While it's not about being a drill sergeant and patrolling every move, it is certainly about creating kids who are aware and alert.
When you're all in the grocery store and want to pick every single cereal in the aisle, it's easy to explain why picking out a few boxes against ten is important. As much as growing children eat, they don't need ten different boxes of sugary grains. This is the opportunity to dig deep into the availability of food when the boxes you choose are running low. Also, food does indeed go bad if not eaten over a period of time that creates more waste – in addition to wasting money!
Discuss the importance of saving early and often
We know from the piggy bank days why it is so important to save. Emergencies happen, unexpected events are part of life, and multiple nest egg to fall back on creates a sense of financial peace. Open a savings account for each child and talk about why it is important to save.
Many banks have checking and savings accounts that are tailored for minors. If they receive an allowance, you have a hobby that generates some income. When they are old enough to be looking for work, make sure that you all discuss their personal financial goals on a weekly basis.
They may find it annoying to keep this in mind, but children need positive reinforcement. Repetition is key, and it will thank you later for all of the valuable information you provided. Saving doesn't have to be painted as that tedious, boring subject. Understand, kids will make mistakes – but don't we all ?!
Create an environment that will help them build a money mindset
The power of analysis and critical thinking are some of the most influential skills one can possess and use well. Creating a safe space for your children to ask questions, make good decisions, make less good ones, and learn from them is the most fulfilling thing we can do as adults to shape their impressive and sharp minds. How many of us responded reactively or proactively to money? No matter where you fell or fell on the spectrum today, we can use everyday events to help you understand the future, which is just as important as the present.
Let's say your child wants to buy something. The first step would be to ask them questions like, “How much does this item cost? Why do you want this article? What Can This Article Do For You? Do you want to save so you can buy it? “Let them think these answers through; This helps them process the value of product sourcing. The next step is the storage process. This physically helps them indicate the "waiting time" – the time it took you to identify an item and the actual time it took to acquire the funds to buy. Sometimes during this process they identify something else they want or scrap the product entirely. During this waiting period, you can also ask questions such as: “Do you have any money left over after purchasing this item? Has anything changed in what you're about to buy? "These critical skills are important and will help shape their ability to be confident in their decisions or turns. Finally what they've been waiting for – buying time! This is the gratification phase where they use their savings and the result of theirs hard work.
Be the change you want to see
All of the above examples not only help our children, they also help us. Removing finance from the tabbed list is now creating a new audience – our children. They become our overseers to challenge us in our own financial decisions. This is a win-win situation for everyone involved. When it comes to family outings, vacations, or planned events, include the children in these exercises. Money can indeed be a family affair and a constant lesson for everyone!
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Marsha Barnes (12 posts)
Marsha Barnes is a financial guru with over 20 years of experience striving to empower women worldwide to be financially successful. Financial literacy and literacy are a passion for Marsha and provide clients with practical information that builds their general confidence in their personal finances.