This morning my eight year old told me that she had a hard time falling asleep last night. I asked her why and she said that because of the rain she started to think about those less fortunate and how there are people out there that doesn’t have a roof over their head or a warm bed to sleep in. “Why can’t we have a world without money?” she asked and continued: “Then there wouldn’t be rich people and also not poor! When I grow up I want to be able to help the poor…. And to be a famous singer!”
While I tend to agree with her I also know that for the time being the reality that we live in is as it is and although I believe that changes will happen, I also know that it will probably take a while. We live in a world where money rules and so does our children and that is why I believe that we should do the most we can to teach them about it and give them the best preparation possible for their future lives.
So what can we do?
Don’t be shy about money, talk to them. Kids have amazing minds and they are working all the time. If you start the topic, they will most probably have a ton of questions. Don’t be shy about what is expensive/ what is cheap/ what you can afford/ what you can’t/ why you choose to buy this and not that. If you are trying to keep expenses down, let them know and let them be a part of the process. How much or how little we involve them, should of course be according to their age and level of perception.
Teach them that math is important. To be good with finances doesn’t have to mean that you have to be good with numbers or vice versa. The math involved in personal finances is really very simple. So why focus so much on math? Because studies have shown that those who feel confident with math and numbers are less afraid to deal with finances and doesn’t see it as something scary.
Be practical. Children have a higher understanding of the practical aspects of life than of the abstracts. They normally do not have the understanding of what is cheap and what is expensive so that is our job to explain. One way I read about recently was the story of a man named Scott Parker who wanted to teach his kids about the value of money in the best way possible. One day he went to the bank and withdraw his whole salary in one-dollar notes and brought them home. There he put the whole pile of money in front of his kids and then started to make different piles for all their expenses (taxes, groceries, house payments, etc.) When he was done there wasn’t much left…. This was more than 20 years ago and according to his son, this made a huge impact on him and the way he thought and thinks about money.