Today we have a guest post from Tina Roth. Enjoy!
I came across a quote a few days back on a friend’s social media timeline, which kept me thinking for the days that followed. Here’s the quote:
“The price of something is different from its value.”
We always consider the price, hardly the value. That’s perhaps the reason most parents fail to educate their children about money. They buy expensive stuff and sneer at the inexpensive ones. This price-driven mentality passes on to their children, and they grow up as the replica of their parents.
The Worth of Money
Am I the only one who feels it needs to stop? I don’t think so. There are plenty others, who feel the same, I suppose you, the readers share my feelings too, otherwise you wouldn’t have been reading this post, right?
Anyways, the point here is money is the yardstick to determine the worth of something. But what’s the actual worth of money? And how should we teach that to our children? Let’s have a discussion on this.
Money is Responsibility
The media and the pop culture portray money as a privilege. What they hide are the responsibilities that come along. Whether you want to earn money or spend it, you need to be responsible.
There are people in our society, who make piles of money, but through ways that are of questionable legality. There are other people, who spend extravagantly without thinking of tomorrow. Both types act irresponsibly. Parents need to educate their children about the consequences of their actions, so children refrain from such actions.
Imagine a society where everyone has rights, but nobody has any responsibility. It’d be a chaotic society. If not handled sensibly, money could change our society to an unheeding, selfish and chaotic one.
Saving is Essential
Parents need to educate their children about the importance of saving. Untapped expenses often increase a household’s monthly spending. Creating a budget and sticking to it is a viable way to stop unnecessary expenses from occurring.
Planning out a budget is all about saving money. Parents need to teach their children how to make a budget. They can energize their kids by making the whole process fun-filled. They can start anytime, especially when a new year is about to arrive. It’s that time of the year when we make new resolutions; the budget can very well reflect those.
A piggy bank or even a mason jar could be used to store money. Parents can give their children specific tasks like putting a dollar a week into the piggy bank, and keep a tab on how much they are saving.
Kids Need Allowance
Gone are the days when kids used to save money from the allowance given to them by their parents, and later invest the money in a Ferris Wheel ride or a big candy bar. These days, parents gift expensive toys to their children, which don’t allow them to do hands-on with money.
If you have kids, I suggest you back to the good old days. The habit of receiving an allowance, saving a tiny portion of it, and then using it for his favorite pursuit can turn money-saving into a habit for your kid. Psychiatrists conducted a study called The Marshmallow Test, which revealed a child’s eagerness to receive incentives, and sacrificing immediate needs.
Several other studies have pointed out the same thing; children, who learn to save money at an early age are better at money management than children, who learn it later in their lives. Providing kids allowances, and encouraging them to save can help them better manage money when they grow up. It’ll make budgeting easy for them.
Do I Need It?
Spending lavishly and extravagantly invites financial problems. From an early age, kids need to be taught to say no to things that they don’t need. Since child psychiatrists advice parents not to teach anything to their kids in a negative way, parents should educate children to ponder whether they need something or not.
There’s a fancy toy in the playstore, and a child has the cheap version of the same toy. If he asks himself whether he needs the toy, he won’t annoy his parents expecting them to buy the expensive one. Expecting such a level of maturity from a kid is unavailing, but unless a child is groomed this way, he’d never encounter this question, even after growing up.
Asking himself “Do I need it?” relentlessly helps a kid learn to separate want from need. This separation is essential to understand the worth of money, and childhood is the best time to learn it.
What do you think of our list of tips to enlighten children about money? Do you want to something new to it? Go ahead and post a comment.
Tina Roth loves to write about personal finance and money management. In addition to being the blogger at PRO Finance Blog, you can find her works on many other finance blogs. When she’s not writing, you might find her working on home decoration or playing with her kids.