“Too many people spend money they have not earned, to buy things they don’t want, to impress people that they don’t like”. This wise saying by Will Rogers kept resounding in my subconscious as I walked towards the grade 1 class of Deepens Elementary school to teach the pupils on this very important but neglected topic “Financial Management”.
It is not wrong to say that one of the challenges people face nowadays is the inability to secure resources for pressing future demands and needs, and the source of this problem can be traced to improper financial management. In a society where being in debt has become a norm and an unavoidable means for survival, the importance of educating the upcoming generation about financial management cannot be overemphasized. Children who have learnt how to navigate the world of debt and credit will grow into adults who have more money for savings, which can help them pay for large expenses without relying on credit, and they can set aside money for retirement accounts.
Most times Parents find it easier and more comfortable to talk to their little kids about Time Management, keeping the right company, Table etiquettes and so on but they often don’t see the need to talk about financial management. Since the kids are young and do not earn a living, they consider talking about Financial Management as a topic for when they are grown into adulthood – but adulthood creeps in fast; because they tend to forget that financial management is not a skill that is built overnight, but a habit that is cultivated through constant practice.
As parents, one of the great ways to lay the foundation of a strong financial background for your kids is starting right on time to teach them about financial management. Kids can only become money smart when they have the right coaching. Since Money has become one of the vital yet scarce resources on earth, a smart parent must make effort to produce money smart kids who can keep them rest assured that this scarce resource will be used optimally. Here are some tips:
Give them an allowance. In order to teach your kids financial management, you should be willing to give them an allowance. You might decide to give money every week to the youngest children, at two-week intervals for preteens and monthly for teenagers. Gradually spreading out the timing will help your children understand the need to manage their spending. Since they know they have to spread a small number of resources around their countless wants; they will have to learn how to prioritize their wants and sieve out the needs from the countless list of wants. Giving allowance to your child gives her a chance to control her own money; also remind her that she would not receive any other cash until the next allowance date.
Make use of Piggy Banks. A piggy bank is a money box where people save money for a certain period of time until they are ready for use. Introducing your kids to a piggy bank is another easy way to teach them financial management. Piggy banks can help your children imbibe a habit of saving money for bigger projects. You can help your kids increase the money in their piggy banks by insisting they save something out of every money they get as gifts or allowance.
Children love to be rewarded for their good works, while building in your kids a lifestyle of proper financial management, tell them that although the goal is to fill up the piggy bank with dollars and coins, until there is no room, but the main intention is to use the money to purchase the gift they have long desired.
Teach them to earn a little extra. Another great way to raise money-smart kids is by teaching your children how to earn a little extra. This goes a long way to prove to kids that money is not just plucked on trees but it is earned through timely smart work. You probably expect your kids to clean their room, help with the dishes and do other daily chores but consider offering them a financial reward for going the extra mile to take on other jobs that go beyond their normal routine.
Getting paid for extra work will help instill good habits and give children more control over saving and spending since they realize how hard they had to work for the money. This will also help them build the habit of going the extra mile when assigned a task since they know each extra mile attracts a cash reward.
Help them understand the true value of money. In order to raise money-smart kids, you must help your children understand that the impact and the true value of money is recognized when it is used to help others. A great way to raise money-smart kids is by letting kids know that the money they get is not just for them alone but that is also needed to help other lives. This will motivate them to save more since a part of their money will also be used to assist the less privileged children around them.
You raise money-smart kids when you help your children earmark part of their allowance to donations for the less privilege.
Mirror a Proper Financial Management Lifestyle. Children see their parents as their first models if you do not showcase the right financial management skills; your children will definitely follow suit. If kids see you spending wisely, they’ll be more likely to follow your example. As a parent, when you stick to a budget during shopping it becomes easier to train your teenager to stick to a budget while spending her allowance.
While educating your child on financial management, you must not forget that children learn by example. Have your own jar of money that you put funds in regularly and let your kids know that you practice what you preach, this means you must save also. Reiterate the message that every time you get paid, you save a portion of your check to help prepare for the future. Let your kids know that you have priorities which you save for and that this includes their education. They should know about why and how you are saving for their college education.
As parents, you should be willing to let your children know when you have a financial crisis. This is not to frighten them or to be used as an excuse to deny them of their basic needs, but it should show a sought of financial openness to your children. Let them know that money does have a constant flow always. You must help your kids realize that most times “mum does not get all her needs met as planned”. Let them understand that there are days you squeeze through scarce resources in order to meet vital needs in the home. This will teach them how to use their little resources to meet their endless needs and also how to forgo some wants for other needs to be met.
In Conclusion, teaching kids to save money will not be an easy task; of course, it demands discipline not just from the child but also from you as a parent but the benefit and comfort enjoyed from exhibiting proper financial management skills are limitless. In this modern society, it is not difficult to see adults who are poor money managers who find it difficult and stressful to make vital financial decisions. This often happens because they did not learn at the right time, how to be proper financial managers. Some parents try to avoid money conversations with their kids; this is very wrong. Parents need to realize that money conversations from childhood help children grow into adults that have a healthy relationship with money and therefore face little or no financial crisis.