Are parents, especially mothers, too soft when it comes to talking money with children?
As a generous mother, you want to give them everything they want, and you can’t discipline them. “Kids are very smart these days” is a clichéd, but oft quoted, parent say in every peer group.
Children are given to instant gratification. Owing to peer pressure or the deluge of alluring products, they may want to buy anything and everything that catches their fancy. But the sooner you empower your child with financial awareness, the better.
Many mothers use an emotive language when talking money with children. But if you are wondering how to get the money talks started, these 5 tips will help you.
1: Save for a goal
Kids ask for expensive goodies and toys often. Instead of dead butting their request for buying, teach them the value of saving for a goal or for any purchase they want. This will help them understand that money is not something that appears on its own magically in the pockets of their parents.
Start with piggy bank savings, a great way for kids to save for their desired purchase. Such savings also help them get comfortable with numbers while counting various note denominations. It will help them delay the gratification until they have “earned” enough by saving enough.
2: Teach them to earn money
Talking money with children begins with teaching them the value of money. And that begins with teaching them to earn it.
You may want to be that doting parent handing out money for your child’s needs whenever they ask. But teaching them the power of earning money can be far more valuable.
Give them some allowance for doing some of their own work like tidying their bed or study desk. This will not only instill in them good habits but also help with awareness that money is earned and has immense value.
3: Make them spend smart
Take them along for shopping activities like errand runs or trips to the grocery store. It can impart valuable lessons. This can help kids in understanding how to spend smartly by comparing prices of commodities instead of buying the most attractive option.
Involving him or her will also help your child develop traits of self control and curb any impulsive buying instincts. All of these qualities will help your child develop a great financial acumen in the road of life ahead.
4: Explain the difference between needs and wants
One of the most significant money talks you can have with your child is to explain the difference between needs and wants. When your child asks for anything in the next shopping trip, talk to him on whether it is a need or a want. Explain the difference subtly while educating your child on the difference between the two.
5: Walk the money talk
Children are great imitators. Whatever you teach may have little or no value if as a parent you are not walking the talk. Set an example to your children by following all the basic financial etiquette.
For example, if you are looking at buying a home essential, talk to your child about how you have been saving for weeks or months. Make sure they are with you when you are comparing prices of the intended purchase. Children are more likely to follow and understand financial discipline when they see their parents implementing it.
Sharing multiple aspects of finances and money can help your children develop strong financial acumen. Bonus point: they’ll love you for it later in life!