He just looked at me, with those big sky-blue eyes of his.
“I’ll pay you for a hug,” I said.
My little 3 year old friend did what all great negotiators do; he stared me down, unblinking.
“I’ll give you a dollar,” I offered. Still nothing. This went a couple of more rounds, before I learned that the going rate for a hug from the little guy is “10 bucks.” So much for the new frugality.
November being Financial Literacy Month got me thinking about the importance of teaching children about money from an early age. What we tell our kids, and the behaviours we model for them on a day-to-day basis, go a long way toward determining their financial future.Here are a few lessons:
· Pay your child a weekly allowance. Start this at around age 8, depending on your child’s capabilities. Kids learn a better appreciation for the value of money when they develop a sense of ownership. Money is appreciated differently when it has been earned in exchange for a contribution of some kind to the family (i.e. household chores). Think about paying your child a dollar amount equal to half his or her age, weekly. But the chores have to be done.
· Teach your child to save part of his or her income. Your child may choose, for example, to save for a large purchase down the road. Whether you make saving a requirement or an option depends on your parenting style. Either way, allow your child some latitude about how he or she spends the money (this is easier said than done, I know).
· Play games that teach kids about money. Playing store or cashier helps teach kids how money works. It provides opportunities to explain the difference between quarters, loonies and that 10-dollar bill my little friend has his sights set on.
· Piggy banks make sense. They help teach very young kids that cash is something you own. That sets them up for success when you teach them about the value of money.
· Don’t waste the teachable moments. This might be the toughest recommendation of all. Stores are designed to make parents crazy, at least that’s how it feels to anyone who has waited in a cashier’s line with an overtired three-year-old. But, as hard as it is to summon the patience, when your child asks for something you don’t want to buy, explain your decision. Be honest about why you don’t want to buy that super-sized pack of gummy bears. Your child won’t like the answer, but he or she will benefit from real conversations like this if they happen regularly.
· Involve your kids in decisions. Discuss prices with your kids. Ask for their input in buying decisions, especially the ones you’re genuinely unsure about. They’ll respond favourably to the invitation to participate. They’ll also come to understand how you make spending decisions.
· Teach your kids how to budget. Take advantage of this generation’s comfort with the laptop too, it will make the exercise more fun and relevant to your child. The development and maintenance of a budget can be introduced at the same time you start paying allowance.
· The basics matter. Part of our society’s problems with money relate to its struggle with innumeracy, which is to say the difficulty too many of us have with basic mathematics. We saw a snapshot of this last week in
, where it was reported that about one-third of school children tested are not meeting the province’s math standards. Ontario
Several of these tips come from a freelance writer who specializes in parenting named Jenny Evans. I found her excellent work at Suite101.com.
What about you? How did you learn about money, and how are you passing on your wisdom?
Check out brighterlife.ca for more great tips!
-with files from Kevin Press, brighterlife.ca