How do you teach your children about financial mindfulness and responsibility? Trends in teaching kids about managing money, finances, and the cultural and academic benefits of this.
Growing up, my family was what you'd might call financially-challenged. All of my needs were meet and many of my wants, but the price of admission into an abundant-like (as opposed to abundant-real) life was my mom working outside of the home, me, having summer jobs, getting a scholarship to private school, and eventually taking on considerable student loans. Call it insanely optimistic, or naive, when I decided to pursue the arts and move to NYC, one of the most expensive and financially divisive cities, I looked to possibility and potential instead of profit margins. While friends gasped at my rent, I thanked the housing gods that I was able to write the check each month.
Fast forward to the here and now, with parenthood and years spent in Asia (where money relationships are quite different than in the US), my outlook on money matters is still bright-eyed and bushy-tailed, I'm as industrious and money-appreciative, and yet where and how I spend my money has impact on my daughter's financial literacy as much as my actual wallet. With that said, curriculums that include financial learning is even more relevant today with a growing number of kids wanting to break out of the traditional 9-5 work model (yay!), increasingly more neighborhoods facing gentrification (meaning marginalized families being pushed even further out of the housing economy), and the allure of fast purchases ($300 sneakers - seriously people!?) over savvy investments (stocks, annuities, property - hello!). So here we have a first of many posts of a new financial literacy series. Quality learning that's free - the way it should be.
Before we jump into the numbers, we'd like this post to set the foundation of this landscape we're about to explore. One of the simpler things about being a parent is the bag of experiences you carry around. From skills to life lessons, your experiences help you in teaching your children things that would help them handle their lives in a better manner. Help them in being better prepared for the future. Today’s parents have survived their share of economic crises. Those experiences have taught them the importance of being financially literate and sufficient.
You would want your children to grow up with an understanding of how to handle their own finances and here are some smart ways in which you can ensure the same.
Walk the talk Be their role model. To initiate their financial literacy, show them how it is done. This needn’t be as big as managing your mortgage, but can be as small as making a monthly budget.
Let technology help Since today’s children are born tech savvy, use their skills in a positive manner. Introduce them to apps that will help them visualize their finances, budgets, spending and other important lessons regarding money. Use these apps and strategies as extensions of maths lessons. Why wait until after they've learned trig to introduce the simple process of balancing their checking account? Think of these apps and software as ways to help your kids construct their own meaning about number and money. One family we worked with, actually set up an account for their older kids with the understanding that half of their part-time job salary would go into the "investment basket" and the other half would go into a separate savings account. The kids could spend any profits they made on their investments and no more than half of what was regularly deposited into that fund. Needless to say, their kids were driven to increase their balance and reluctant to dip into the principle. They strategized not only on how to make more money but also on how to spend it mindfully. Love that!
Introduce play-based learning Play based learning takes deeper roots in the brains of children. In simpler words, getting them to play certain board games or video games will help them understand how to manage money in a virtual world. A lot of which is easily translated into the real-world.
Training Let them earn their allowance. Use basic household chores to teach them the value of earning money. Use the same pocket money to train them about budget, savings etc. They might not always like it, but it is better to tolerate their sulks for a while than letting them grow up without a clue about handling their own finances. If you happen to coupon (a personal money-saving strategy), include them in the process. The mindfulness of couponing extends beyond saving money. The art of stacking (layering different coupons for maximizing savings), stockpiling (buying in bulk with coupons), and essentially delaying gratification are essential attitudinal shifts you can't learn from a math book.
Keep them involved It is not always easy or even appropriate, but try to keep the children involved with the financial decisions you are facing. Whether you can afford to buy that new TV or prioritizing purchases or even the monthly budgeting and saving system that you have employed in your house will help them see the way finances need to be handled. Growing up mother treated me to a super-yum cafe date almost every Sunday after church service. This bakery had mega donuts and pastries to die for. I could have one. Just one. Until the next week. Yes, I had to wait a whole week (and endure mass) to get to my next treat. During the week, the only goodies in our house were the fresh fruit kind. This was the 70's so fruit was cheap and fast food and treats were expensive. A luxury. It was only years later that my mom revealed the reasoning behind the Sunday bakery visit. I thought it was a religious bribe, but really it was a subtle lesson in budgeting and mindful spending. Less was indeed more.
While as a parent, the burden does fall on you to educate your children regarding financial mindfulness and responsibility, here are a few lessons that schools or your homeschool curriculum can incorporate to help.
Guided activities which help children make decisions regarding money
Teaching them how to budget money for various expenses
We all talk about careers. Let the children learn how it translates into earning
Help them manage their allowance, spending and saving
Introduce concepts of ‘comparison shopping’, ‘needs Vs wants’, ‘investments’, ‘accountability’ etc.
Given the volatility of the money markets all over the globe and considering the importance those few green bills have in our lives, it is essential that we bring up our children with the proper knowledge of handling at least their own money.