Money sense is best taught when children are young

QUESTION

Dear Adele,

We are young parents with two youngsters under six. We are looking for ideas about how to teach our children about money. Any suggestions?

Fledgling Father

ANSWER

Dear Fledgling Father,

According to Britannica “Money is a commodity accepted by general consent as a medium of economic exchange.” Values and prices are expressed by it. It circulates everywhere and allows trade to occur. It is the world’s main way that wealth is measured. “Money is central to transacting life, day in and day out”, says Sam X Renick.

According to Colleen O’Connell-Campbell in the Financial Post, “Our financial choices are based less on experience, knowledge and desire, and more on the money beliefs we formed when we were children.” Colleen’s finding, in her experience as a wealth advisor, is confirmed in research. A study at the University of Cambridge entitled ‘Habit Formation and Learning in Young Children’ found that kids’ money habits and thought patterns affecting their capacity with money, are pretty well set in place, by age seven.

So, dear Fledgling Father, you are definitely on the right path looking for ways to teach your offspring about money at their tender ages.

Listed below are some interesting and easy things to teach kids about money, described by Ramseys Solutions in an article entitled ‘15 Ways to Teach Kids About Money.’

  • Provide your little ones with clear piggy banks or glass jars in which to accumulate money. Concrete and visual opportunities to see and handle money are best.
  • Model good spending habits by using cash and explaining credit. Go over receipts.
  • Show children how to pay for desired goods with cash from their piggy banks.
  • Discuss purchase decisions and the consequences of those choices.
  • Demonstrate to youngsters that money is earned not just given. Provide them with opportunities to earn money. Talk to your children about ways to make money from a young age.
  • Develop goal setting and planning skills for spending. Avoid impulse buying.
  • Communicate the need to share money by donating to charity.
  • Model acceptance and happiness with one’s financial circumstances by avoiding comparisons with others’ wealth.
  • Make certain your progeny has bank accounts and opportunities for money management within it.
  • Ensure that a portion of the children’s total income is put into savings for college.
  • Find ways to avoid student loans, and expensive universities. Explore bursaries and scholarships.
  • Educate your young that debt is not a good idea and that they should avoid credit cards. Explain interest rates and compound interest.
  • Teach your kids how to keep a budget and stick to it.

For further reading on this topic, you might want to take a look at an article by Cameron Huddleston entitled ‘How to Teach Your Kids Good Money Habits’ or one by Anna Attkisson called ‘Teaching Kids About Money: An Age-by-Age Guide.’

I will conclude with a few inspirational quotations on this subject:

“Do not save what is left after spending, but spend what is left after saving.” — Warren Buffett                                                                

“Too many people spend money they earned… to buy things they don’t want… to impress people they don’t like.” — Will Rogers

“I don’t want to make money; I want to make a difference.” — Lady Gaga

Best wishes Fledgling Father.

Sincerely, Adele

Email your questions to maryadeleblair@gmail.com and please put Heart to Heart in the subject line. Note that all columns will remain anonymous.

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