“Mom, can you buy me this toy please?” “Please Daddy, can you give me some pocket money?” Every parent has undoubtedly come across such pleas from their children. Indeed, children are raised and meant to be worry-free since their parents typically take care of all their needs at home. However, if children do not learn about money at a young age, they will not have a real understanding of it until much further down the road, before it might be too late. So how can we teach our children, who are still in their early years, the proper principles of money management? Here are 3 basic principles for you to consider applying in your daily parenting lives.
#1 Money is Just a Means to the End
While all parents strive tirelessly to provide for their families with abundance, stability and ultimately happiness, we must let our children know while the blood, sweat and tears of their parents have earned the money needed to provide for their abundant lifestyle, happiness does not come from money per se and money does not buy you everything, including happiness. Understanding the basic nature of money as merely a tool shall set the right context on how to treat money which will go a long way in building the right attitude toward treating and managing money.
Key concepts about money for children:
- Money must be earned because it is not a limitless resource.
- When using money, it’s important to discern between “wants” and “needs”.
- While having instant pleasure is enjoyable, it’s necessary to delay material desires and learn to save and look forward to future opportunities for more rewarding outcomes.
- Money is important, but it is not everything in life. People’s happiness is enhanced by their lifestyle choices, not by how much money they have.
#2 Earn Your Keep Even When Young
Take advantage of the chance to teach your child not just to save and spend, but to earn it themselves as well, rather than providing whatever your child asks for, albeit sometimes with strings attached and conditions. Try engaging your children proactively in daily scenarios to experience and understand the concept of earning, instead of taking for granted that money or desires would be provided by parents automatically because inevitably that will not be how it works when they grow up.
Example: Family Weekend Fair Sale
- Child’s role: shopkeeper
- For parents to purchase their children’s handicrafts and teach them the value of hard work, the sale encourages kids to create their own artwork, crafts, and other goods beforehand. This will teach them an ideal concept of earning and how to set prices.
#3 Establish the Relationship between Work and Reward
Parents have a variety of ways to give suitable rewards in their daily parenting life for their children as they accomplish specific tasks and chores, such as doing the laundry, clearing the table, etc., in order to establish the concept for children from a young age that hard work pays off and will be rewarded. This would also nurture the attitude of not just “holding their hands out” for “free money” from their parents. Instead of passively waiting to get their allowance from parents, children get the opportunity to train up their daily life skills, and develop independence and initiative, while at the same time enjoying a greater degree of autonomy and satisfaction through reaping the rewards from their work.
Conclusion – Developing the right concept of money must start at a young age.
Even though today’s kids grow up in a world with much more resources than how their parents used to be in, children sometimes lose sight of “money” in its truest sense. Let’s raise money-smart kids by instilling the right concepts of money in our children early and together we shall build a bright financial future for the next generation!
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