Helping our children to learn great financial habits Part 1

August 15th 2017 | Categories: Money, Family & Relationships |

I love that kids think big and genuinely admire those lofty career goals of being both an artist and professional surfer before segueing into rock stardom and interior design, all by the age of 25. No matter what your children aspire to be, a little understanding on money matters will help them on their path to greatness – especially for that fabulous but tone-deaf child with ambitions of being the next Taylor Swift. Research shows that by their 7^th birthday kids have already formed money habits that can stay with them for the rest of their lives and this, parents, goes both ways. We can teach our children some wonderful lessons but we also need to put our own weaknesses under the microscope to ensure we’re not passing on bad habits too. Here, we take a look at a few habits we can all improve upon;

Bad Habits

1. Problem – Instant Gratification

Many kids, especially little ones, are under the impression that the more they carry on in public places (i.e. supermarket queue), the more likely Mum or Dad are to give in and buy them what they want. Bigger kids won’t be throwing tantrums but may instead to opt to question you repeatedly and relentlessly in the hope that you’ll eventually cave in. These days, money is invisible to many children. In the world of internet banking, Pay Wave, EFTPOS and online shopping, kids rarely see or handle cash and as a result, aren’t familiar with the costs of things in relation to earnings.  They may also believe money to be unlimited.

Solution – Be strong and don’t give in

Let them have that almighty tantrum even as the other shoppers give you the evil eye. Help your child understand the value of saving for those things they really want and make money more visible to them.  Get your child to put aside pocket money, do extra chores at home – whatever works for your family. And perhaps, by the time you next return to the supermarket they may be ready to hand over their own hard-earned money for that item they needed so desperately (fidget spinner anyone?

2. Problem – Underserved Pocket Money

Many of us are guilty of handing over money (weekly/fortnightly) even when the kids have been slack on the chore front. Alternatively, we pay our kids the same amount even when they don’t all make the same effort when it comes to homework, bed making, room tidying, dog poo duty, school bag unpacking, taking out the bins etc.

Solution – No chores, no pocket money

The answer is simple; effort equals reward.  Help your children determine the pocket money system they want. If they’re into devices, find an App relating to household chores that everyone likes. And when it comes to those little achievements you value in your household (i.e. jobs around the house, behavioural improvements, extra reading, less technology…) only pay up according to the effort and commitment from the kids.

3. Problem – The Card Culture

We all swipe away so readily these days using our cards to pay for almost everything, even when we don’t have enough money in the account to cover costs. How often do you sit down and work out what was spent on a given week on those cards? What items were purchased on credit? With day-to-day spending so card heavy, kids aren’t witnessing us counting out cash each time (as our own parents did), or working out what’s left as our weekly budget dwindles with each spend. This autopilot spending rubs off on kids and we, as parents, become just like banks or credit cards – a fantastic resource with money always at the ready.

Solution – Go old school with cash

If your children are school-aged, consider going ‘cash only’ for a week during the holidays when more of your everyday purchases are made whilst the kids are with you. Go grocery shopping, buy petrol, take them to the movies – do all those regular things but use cash instead of cards. At the outset, count out the money together and then keep a running tally. They’ll soon understand how overpriced cinema snacks are! Help your children appreciate that the money you access is limited, attained from hard work and savings and needs to be carefully managed.

4. Problem – Better bartering

We’re all pretty good about shopping around, doing our research, taking time to seek the best deals online. And when it comes to our preferences at the supermarket we’re all different; some shoppers opt for the cheapest product on the shelf, others are brand loyal while certain buyers only go for only the most expensive items. But when it comes to bartering, there’s much room for improvement. The whole ‘pay less for cash’ or ‘we’ll beat any competitor’s price’ was a foreign concept (in the mainstream at least) until the early 90s when retailers like Bunnings and The Good Guys entered the fray. A lot of shoppers lack confidence when it comes to price bartering or highlighting a competitor’s offer. Our kids can learn from our shortcomings and be more direct and savvy when making purchases.

Solution – Savvy shoppers

In addition to encouraging your kids to be comparative shoppers, they need to be comfortable in asking for the best price. We live in a culture where price matching and price beating is the norm – retailers now pride themselves on this concept – with the advertising to prove it. As a grown-up still coming to terms with bartering when buying, perhaps it’s time to practice what you preach and do your best wheeling and dealing in front of the kids with that next big-ticket purchase.

5. Problem – Having your head in the sand

There can be a tendency, especially when money concerns loom large, of not wanting to open bank or credit card statements. The ‘ignorance is bliss’ approach is not enabling anyone to learn from mistakes or improve upon poor spending choices. Show your kids the information at hand – even if it is a less than a pretty picture.

Solution – Keep it real

Your children will value being trusted with information that impacts them. When it comes to kids and money matters, having the confidence to ask questions is very important. Experts agree that encouraging an inquiring mind and building awareness about money will greatly benefit a child’s financial understanding. Rather than dismissing their request with ‘it’s too expensive’ or ‘we can’t afford it’, arm them with knowledge instead about ‘want’ verse ‘need’ and why a weekly budget covers the necessities and not those extra indulgences.   It’s never too early for kids to learn good everyday financial behaviours. As parents, we have the most important influence on our children and it’s up to us (no pressure) to encourage terrific little savers and investors. Teaching them the basics now of budgeting, spending and saving will help our children establish important money habits for life. And so, armed with such knowledge, may your future inventor, rock star, dancer, artist, scientist, App developer, pilot, vet, chef or astronaut continue to think big and aim for the stars.

A good habit is to make informed financial decisions. We can provide you with the knowledge to do this. Get in touch to start your journey today.

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_{Our guest writer, Yvette Harper, has many years of experience in the media having worked at Channel 9, Prime7 and in print media. Yvette’s writing background is diverse with articles published in magazines such as the Australian Women’s Weekly, Practical Parenting, Coast Living and Focus Magazine. With her freelance feature pieces, Yvette’s profiled celebrities and written in-depth articles on breast cancers survivors and organ donation. She has also written magazines for Coffs Coast Tourism. More recently, Yvette has focussed on copyrighting for business clients to improve their relevant marketing material such as website content, social media, newsletters, internal articles, advertorials and award submissions.  Yvette’s been blessed to have some fascinating life experiences too such as managing a wildlife photographic camp in Botswana and living in Southern Lao where weekly grocery trips meant getting the passport out and going to Thailand with her young children. Yvette and her family are now Coffs Harbour based.
We credit the following article as original source material from which the above article was developed https://mozo.com.au/family-finances/6-bad-financial-habits-you-re-accidently-teaching-your-kids}