The biggest challenge with any lesson that you’re trying to convey to your kids is finding a way to make it stick. Sure, you can tell them why something is important and even give them a perfect example that they are bound to understand, but this is not guaranteed. Instead, you need to be extra creative.
This is especially important when it comes to the matter of money and finances. Namely, their relationship with money needs to be established as early as possible. Knowing how to manage their money will predetermine them for success or doom them to fail in every financial endeavor.
Still, important as it may be, how does one actually pull it off? Here are some ideas to help you get going.
Use Media to Your Advantage
One of the ways to ensure that your kids have understood the information is to try and deliver it through the media. There are a lot of great cartoons that can subtly teach them about financial responsibility. For instance:
- Phineas and Ferb: The Lemonade Stand
- Arthur: Arthur’s Pet Business
- Max & Ruby: Bunny Money
The list goes on.
Fables like The Ant and The Grasshopper are another great way to send a powerful message. You see, the ant is not starving because he saved during the harvest season (while his income was high/existent).
Sometimes, even though the message is clear and masterfully inserted into the media format, your kids might have some trouble interpreting/understanding it. After all, while they might memorize everything that happens here, their reading comprehension might not still be as high. This is why you need to talk to them afterward and check if they understand what it’s all about.
Lastly, you should look for a theatre for children and see if there are any plays that fit your agenda. This old-school entertainment format might just be memorable enough for them to embrace this message even quicker.
Give Them an Allowance
You can start by giving them a bit of their own money – an allowance. This way, they have their own finances to manage. Now, it is important that you are both strict and fair. They either need to receive the same amount on a regular basis (in order to understand how regular income works) or (even better) they need to be paid based on their behavior and chores they performed.
If they want something, make sure to tell them that they should get it from their allowance. If one allowance isn’t enough, explain how they can set aside their allowance (or a percentage of their allowance) every time they receive it.
The key thing here is not to cave in and buy them the thing they want if they can’t afford it for too long. They need to save for it. It’s OK that you buy them something else. After all, there’s nothing more natural than spending money on your kid. However, this is the one example that they’re supposed to use as a valuable lesson.
In the long run, the lesson they learn will be much more useful than anything that they want you to buy (at that age). This is true even if they want something that will allow them to pursue a creative interest or passion (like buying them a camera).
Gamify the Experience
One of the ways to make all of this more interesting would be to gamify the overall money-saving experience.
For instance, you should get them an interesting piggy bank so that they have a place where they can deposit the money. Keep in mind that the younger they are, the more fun they’ll have from the very act of putting their money in the piggy bank. In fact, even adults can benefit from saving plans (like a 52-weeks saving plan).
Video games can also play a huge role in teaching them financial responsibility. After all, strategy and RPG video games have their own currencies and their own economy. Some MMO (massively multiplayer online) even have their own financial systems and currencies that evolve and, in many ways, act like the real economy.
If you have more than one child, you can even turn this into a competition. The key thing is that they have so much fun that they fail to realize that they’re learning in the process. This task is not easy to achieve, but it’s possible with the right organization and motivation.
Be Honest About Money
Many parents believe that by sheltering their children from the hard reality of financial life, they’re doing them a favor. This is not necessarily the case.
- You see, telling your kids that they can’t get something because it’s not a priority is a good thing.
- Telling them that they need to wait until your next paycheck before you buy them something is also a good lesson (even if things are not necessarily so dire financially).
- Telling them that they’ll get something once their behavior improves or once they earn it is one of the best stances that you can assume in this situation.
The thing is that you’re telling them the truth. Sure, they shouldn’t worry about the money while they’re too young, but one’s budget and financial health are generally a serious matter. At the very least, they need to be aware of the fact that it’s something worth worrying about.
Solving all of their issues as soon as they pop up, never making them work for anything, and intervening whenever they start crying is bad. It will teach them a model that will be completely unsustainable once they reach a certain age.
In the end, you need to understand a couple of things. First, they’re never too young to start learning about the value of money. Two, this is your responsibility, and while there is a chance that someone else will step up, you should never pass on something so important to someone else. Lastly, you’re doing your child a huge favor, one that they will be thankful for, for the rest of their lives. Therefore, there are no higher priorities.