Finances are a big part of our lives and often play an integral role in the decision making. It also becomes a point of discord and we often hear parents saying that this generation doesn’t understand the value of money and that their demands are endless.
We may not realize it but financial education of our children starts at a very early age and the conversations in a child’s environment whether home or elsewhere shapes their views on money.
An important factor always overlooked is whether our conversations around money imply a sense of lack or gratitude for what we have. The feeling of abundance doesn’t necessarily come with money in the account. With money come materialistic pleasures and physical comfort but whether it brings peace and harmony depends on our attitude towards money. If we talk of money and resources more in terms of contentment and gratitude chances that our children will imbibe the same will be higher. Contentment, in my opinion, is the safety gear against the giant waves of depression and anxiety engulfing the youth today. Contentment not just with material things, but also with our efforts, resources, capabilities, opportunities, about where we are in our lives. Many people believe contentment means stagnation, ceasing of self effort. I have seen the opposite, that the people who are contented use their resources in a more generous and uplifting way. Just their presence is a blessing, a solace against the disgruntled world.
I had an interesting conversation with my child about what rich and poor means sometime back. He casually remarked “mummy we aren’t rich” and I asked him what does rich mean and he replied it means to have lots of money in the bank account. I smiled and asked him what rich people do with their money. That got him thinking. Then I gently added we have enough money for all our needs and we have few needs so we are rich. He looked at me “really mummy?”. I asked him, ‘suppose people who have lots of money can buy anything they see but they keep wanting and buying more and more, then what will happen?’ He replied ‘they will not have space to keep so many things and their money will finish’. Then he exclaimed and said, ‘Oh and they will become poor!’. Of course it has taken a few rounds of similar discussions and is an ongoing process. I also had to make the effort to identify the origin of the thought and tell him that his parents do have the money to buy him the toys he ask but are not convinced of the need of it.
But the point I want to make here is that we as parents should be able to identify such opportunities and make good use of them. You don’t want your child to grow up thinking they are poor and lack resources. It diminishes their self confidence and can make them anxiety prone in future. It’s like having the sympathetic nervous system always ON, always in stress. Do not envy other people who have more than you, especially in terms of having better luck than yours. You may want to look at them with awe and mention their hard work, commitment, smart risks etc. Your children hear the conversation if it’s within their earshot and you don’t want them to grow up thinking they are unlucky. This is wiring the system for stress. If we as parents are disgruntled with our own lives but ask our children to be grateful for all the privileges they enjoy, they are going to see us for the phoney we are.
On the other hand, if children are raised in a home where people practice gratitude and contentment they imbibe it internally. They tend to be less stressed and happier. Developing an understanding from a young age what their needs are, what gives them true fulfillment versus what is simply for show and short-term pleasure will help curtail the race for money and increase general satisfaction in life.
It is also necessary to understand the differences between desires and needs. Fewer desires translate to less need for money and more satisfaction. This means that it’s not necessary to own everything that looks good or that a neighbour/colleague possesses. To let them know they don’t have to define success by the exotic location vacations or expensive toys. One of the considerations should be objective assessment of whether owning a thing will help in making one’s life easier( for eg. a toaster) or whether the primary purpose of owning that stuff is showing off in public or pleasing someone( eg. a very pricey jewel ring). This distinction will help our children in many ways.
If your children are adolescents, you should have discussions with them on finances, on merits of savings, how to spend money and when to reconsider your strategy if you seem to be going off track. It helps if you can give examples from your own life. It would help if we could assign a certain portion of our money to donating to a cause and being involved in whatever little way we can. This in my opinion will help our children develop a healthy perspective around money. Money itself is not bad or good but our attitudes around it and how we use it makes it so. Earning money is not bad as it can be used in making other people’s lives better. It will also help them connect with a bigger reality and purpose in life than just “ I, me, mine “. Being connected to a larger purpose in life is another safeguard against the monster of mental health disorders.
If your kids are young, take them grocery shopping with you. If you are going to another vendor because you can get the same quality of vegetable for less money. Give the money in their hands to give to the vendor. You can also introduce mathematics in this way. We have a game at home where we go shopping and there are different shops( toys, groceries, vegetable fruits, confectionery, apparels etc . ) As we play we make comments, ‘no, we don’t need it’, or ‘let’s take the healthy option’. This is a simple example of how teaching can be made fun. The learning here for the child is that one doesn’t always have to say yes to buying things. So many times I have said to my child’s demands, let’s visit it in a few days. Just to teach him not all wishes in life will be fulfilled as you voice them. A great outcome of delayed gratification has been that sometimes my child realizes he doesn’t want it any more and he has been doing fine without it.
Older children above twelve years can be involved in some simple financial decision making in their families. If you have limited income to run your families, make your kids part of the budgeting process especially when it concerns incorporating their demands. The only point to keep in mind would be that it should be a fair discussion and an empowering process for the child and not conclude in parents telling the children “now you understand how much trouble we take for you”. That lesson will sink in by itself.
The best way to teach is to give responsibility. Once a nursing staff shared with me that she had given her daughter responsibility of running the kitchen soon after she finished with her 12th boards. She said we gave her the budget and initially there were days when she used the daily budget in just two meals and the family had to sleep on half stomach but in a month her daughter learnt how to portion the budget and then it went smoothly. At the end she quipped “you should have seen the glow of confidence in her. No activity class would have given her that.” So see where you can start giving responsibilities, explain the consequences and be ready to face them as a family as in the example above when the whole family did sleep without dinner without shaming the child. This motivated the girl to do better and she learnt not only to cook but to manage finances as well.
Piggy banks are a good way to inculcate the habit of saving. Also children can be encouraged to save for their demands later on. Younger children can be taught the power of choice and also we can understand their bent of mind by giving them maybe Rs. 20 per week and asking what they want to buy with that. One can also offer alongside that they can collect it for 4 weeks and at the end they will be given Rs 100 with which they can buy a new toy. In these simple ways we can introduce the concept of saving, choice making, mathematics and the power of compounding. It’s good for adults too to prioritize their goals and save accordingly.
I have given some of the principles which I consider important. Definitely many more examples and perspectives can be given but my main focus as always has been to give more clarity to parents and help them understand that all education starts at home. As parents we will have to watch ourselves to be able to instill values in our children.