Reasons why Teaching Children About Money should be a Top Priority

There is a large number of the community, whom like myself, grew up in a family under welfare. We lived in government subsidized housing estate where most people in the immediate community were unemployed or blue collar workers. As you could probably see, financial education for kids was not existent in my childhood. I can still recall my economic teacher in high school telling us that more than 80% of us will end up like our parents… trapped under the poverty line. At first I didn’t want to believe it but after finishing high school and only about 10 people in our year making it to university it was hard not to see many re-live their parents’ footsteps.

In my 20s I crossed paths with a neighbor of mine who explained to me that her sister is pretty much living the life her mum had once lived. A single mum with 2 kids to different fathers and is dependent on welfare.

All those dreams of breaking out of the poverty trap seems to me like every kids goal in our society back then, but obviously it wasn’t a dream for many. As you can see financial education for kids didn’t even cross our minds back then.

You are reading this because you have a desire to dream beyond your pass and also teaching children about money is one of the most important things you want to do. Congratulation on making that critical decision to step out of the poverty trap and help your child do so too! Reflecting on my friend’s sister’s situation I think it was the simple goal that she set “to be able to have the life her mum gave her was good enough for her”. We need to know that being satisfied with what we are given is a great learning experience but it’s not what will drive us to succeed and achieve potential that is easily achieved if we put our mind to it.

Teaching kids about money will not only enrich their life experience but also help us review our daily priorities.

To live above the poverty line requires us to:

1. Teaching money to children by changing mindsets
Just because you come from a poor family does not mean you need to stay there forever. Confess “I am not poor” repeatedly to yourself daily so you start believing it, is a powerful mind exercise that can build confidence and vision for your life. Repeating the words “we are poor” to your children and yourself will only tell them exactly that. Teaching kids about money requires time and hard work on our part but those words “we are poor” only breed negativity to your child. If they ask for something you can’t afford at the moment, say “You can have that later when ________”  it could be birthday, Christmas, after you get your pay rise, after they have saved enough from their pocket money. This always gives them time to learn if what they wanted was an impulse buy or something they really want.

2. Plan a Kids Budget wisely
Be accountable to yourself and your children that you will not live beyond your means. Setting this example to your children will help them do accordingly. This will teach them about a kids budget. Practice what you preach as children learn more from what you do than what you say. With governments and families all in big debt, credit being so readily available we need to be very wise with our money. Children these days think everything gets paid on the credit card. I have heard children answer back “just put it on the card mum” when their parent said “I don’t have any cash on me”. We need to be wise when we do use a credit card that we always pay it off in full when it’s due. We need to explain to our children that the plastic card does come with a statement at the end of the month and mum & dad need to pay it off with our savings.  Not showing kids the complete picture distorts the truth from them and this will limit their understanding of money to an unhealthy state of free spending. You could create a kids budget so they can be wise with their money. Budgeting for kids is definitely an important topic when teaching money to children.

3. Be Creative when teaching children about money
Look at ways to make the most of your situation. If you want to take them on a holiday but you just can’t afford it right now, why not go camping in your back yard? Spring clean and see what is no longer needed and see if you can host a garage sale or sell it on e-bay for extra cash. Offer your services to your neighbors in the community. Gardening and house cleaning are always sought after if the right person and price is offered. If you are a great cook or baker you may offer that service. Many families work long hours and are not prepared to make healthy nutritional food, it might be worth offering your service to them. Do you have a green thumb? Plant your own vegetable garden will not only save you money at grocers but you can also sell your excess. Tomato off the vine is much sweeter than those at the shops. What you do are doing here is teaching kids about money by demonstrating how to be creative.

4. Second Job
Sometimes if the cost of living is getting more challenging we need to work harder. Look for casual or part time work that can assist with paying the bill. The financial education for kids sometimes is to show them that we all go through hard times and we need to do extra to compensate for it.

5. Second-hand
We live in a materialistic world and people buy for the sake of buying. Do your homework before you go out to make your next purchase. Second hand clothing stores stock many clothes that have never been worn before for a fraction of the price of brand new. Check out websites like eBay and look out for the old fashion garage sale and fete stores. Speak to friends when you want to buy something. Teaching children about money is about thinking about alternatives and sharing this idea with your child.

What do you think about the above? You are welcome to share your comment, experiences and questions below.