How to teach your children about money

 by Ife Adedapo 

   

 

Even if your children cannot start working for a pay now, teaching them money management will be of help in the future, IFE ADEDAPO writes

The essence of working hard at a job is to earn a living, add value to the society and build a fulfilling career. Experts say the knowledge of the importance of hard work, the monetary compensation that accompanies it and the judicious use of the money earned should be passed on to children early. This, they say will be a leverage on which the children will plan their future.

One of the essential duties of parents to their children is to provide for their immediate needs. Professionals say these needs include basics for survival like food, shelter and clothing; they may also include other nice things like toys. In addition to providing for their children’s immediate needs, parents need to provide for their future temporal needs by teaching them to be financially independent adults.

Experts recommend several ways by which parents can teach their children about money and foster positive attitudes and habits. They suggest everyday opportunities like shopping, paying bills and withdrawing cash from the Automated Teller Machine to teach their children. The teaching can start as early as age three or once the child knows the value of money.

According to foreverfamilies.byu.edu, the following methods can help parents raise financially responsible children.

Discuss with your children

Experts say to build the financial knowledge of your children, talk about how you earn money and how you plan to spend it. When you take your child to the grocery store, explain what prompts your purchasing decisions. Explain why the budget for a particular item is more than the other.

They say it is common for them to request for things they desire, often without a good reason. Therefore, let them know they cannot have everything, but discuss how important it is for them to wait for what they want.

Be a good role model

Your children will develop their financial attitudes and behaviours by what they see you do, not what they hear you say. Experts say because they are very observant, children will learn many of their money concepts by watching you and copying your behaviour. Actively encourage good values. Teach your children the value of work and teach them responsibility. Teach them delayed gratification by letting them save towards a goal of a new bike or video game.

Experts say many successful financial milestones are achieved by goal-setting. Encourage your children to set savings goals and work towards them. Ensure that the item is not too cheap so that they won’t be able to afford it for months. This will teach them good savings habit. Let them know that even you have things you want and cannot have.

Open a savings account

Financial advisors say for easy planning of a child’s education, banks in Nigeria have different packages that ensure adequate planning for a child’s education and financial future. Their parents can open one for them

Explain to the children how compound interest works and show them how their money grows in a savings account. Expand to a checking account once they are ready.

Set limits

Even if you are able to buy your child everything he or she asks for, experts say you must refrain from being overindulgent. By fulfilling all their demands, you may deny your child of several things: appreciating things that cannot be bought; being motivated to work hard; persevering through obstacles and frustration; and achieving a hard-won goal. Learn to say no to your child and be firm.

Have them manage money now

To manage money adequately, experts say you should give your child an allowance, whether or not it is tied to chores, and give him or her some general guidelines on how to spend and save it. The emphasis is on general because your child should have enough freedom to make his or her own decisions and mistakes. Encourage young children to bring their allowances with them whenever you are shopping.

This, they say, will help them make decisions on whether the item they desire so much is worth spending their allowances on. If you do not want to give your child an allowance, allow him or her to manage money by letting him or her pay the grocer or the parking attendant.

Teach them to give

Financial advisors counsel that you should help your child experience the good feelings of sharing his or her income with others. Encourage your child to regularly contribute a portion of his or her income to a charity or help your child buy treats for the family. Adopt a family through your church during the holidays or give your child the responsibility of buying or making birthday gifts for friends. Also, teach your child to contribute in ways other than giving money by giving time, energy and skills to help someone else.