Guest post from Sue of SueSundstrom.com:
As my husband and I transitioned from a dual income household (without children) to a single full time income after having children, we have adopted more frugal habits (out of necessity!), and have always avoided credit card debt.
We’re doing our best to instil these same habits into our children through what we teach them about money. Today, I’m sharing 6 ways we do this.
1. Alert them to media influences.
Children learn to want more by watching advertisements. The media has incredible influence.
When they were very little, my children watched their favourite shows on a children’s channel that didn’t have any adverts. During this period, the only time I had a challenge with ‘wants’ was when we were shopping together and they saw what they liked in the shops.
When my children got a little older, they switched to a TV channel geared towards primary school aged children, which did show advertisements in between shows. We noticed a significant increase in their desire for things as soon as they switched!
My husband and I talked to them about the subtle messages found in marketing and explained how some of the messages enticed them to buy.
By making them more aware, they became better critical thinkers and they no longer just blindly believe every message.
2. Be firm and don’t give in to instant gratification.
When we went to the supermarket, I would hardly ever give in to demands for toys and treats, and so they got used to not being able to buy a toy just because we went to the shop.
My typical response when I got a request from them was ‘Put it on your birthday list or Christmas list’. This helped them have a ‘cooling off’ period on things – often, later, what they wanted didn’t seem as important anymore and wouldn’t even make it on the ‘gift list’.
Teaching them to think twice before buying something has led to them adopting more of a ‘delayed gratification’ approach – now, on their own, they will often work out for themselves whether or not something is worth the cost. For example, we were at a theme park the other day and after my eldest son saw the cost of the ‘Fast queue pass’ option he said, ‘It’s not worth it – look how much it is, and it’s not even for most of the rides that we want to go on’.
This showed me that he had learned some restraint when it came to spending!
3. Teach the value of working for money and saving up.
Our children have generally had to save up themselves for bigger purchases, like a Playstation or their own tablet, because we wanted them to learn how to save and wait for something.
The hard work involved in saving for it means they appreciate and look after it better too, plus they learn the value of work.
I loved how our sons got really creative and made their own things to sell at the bottom of our driveway, including creating drawings and finding unused toys, books and DVDs to sell. Some kind neighbours bought from them (out of pity I think!) But they learned some valuable lessons of resourcefulness, creativity, persistence and courage – it took courage to stop passersby and ask them to buy from them. They were bolder than I would have been!
They also learned to create their own ‘marketing’ signs, like ‘Buy now!’ and ‘Sale’ or ‘Buy one get one free’.
Then they offered to do things around the house. My youngest son cleaned our car, they both folded clothes, and put aside birthday money. They learned to be patient and save up.
4. Help them be immune to the need to constantly ‘keep up’.
I don’t want my children to feel they MUST have the latest and greatest of every new iphone, technology, clothes or home decor fashion… so I made sure to try and to demonstrate to them that it’s really not important to me. Now, that is the attitude they have too.
My sons don’t care about having tons of clothes or lots of games and things to ‘keep up’ with others. Thankfully, they are still immune to it. Now, sometimes when I offer to buy them another shirt, they say, ‘Oh no thanks. I don’t need one’ !
5. Model spending within your budget
It’s fairly common for my son to lean over my shoulder and ask about what I’m doing when I’m filling in our budget on the computer. I
I am grateful to be able to use those moments to teach him the value of always knowing where your money is going and how much you have available as discretionary spending money.
6. Teach them about giving
Giving is another important part of money management.
My husband and I both support children in extreme poverty through Compassion International, and our boys know about these two children who have very little materially. They know that our contribution helps ensure these children get the opportunity to go to school, and to escape poverty.
We hope we are teaching our boys to be givers through our example — as well as how grateful they should be that they are wealthier than most of the world’s population.
When they are a little older we’d like to take them on a mission trip to visit children in disadvantaged situations. This will give them a perspective that will probably change their lives like nothing else could!
How about you?
What are your best tips to teach children good money management?
Sue Sundstrom is a coach and writer who is passionate about helping people fulfil their dreams. Get more tips and inspiration on how to live fully by visiting her blog.