I mentioned previously that we have windows of opportunity to teach our children certain things, and the value of money is one of them. A primary way we instruct is through our own example, so the first thing you need to do is determine how you handle money. Are you a spender or a saver? Do you make purchases impulsively or only after a great deal of thought? Do you know how to delay gratification? Do you want your children to grow up and be in the same financial position you are, or in a better one? If you need to make changes in your own spending habits and understanding of how money works, how are you going to accomplish those changes so that you are a good model to your kids? They are watching us!
My husband and I were recently discussing how our kids caught, or didn't, our own values and habits around money. We definitely feel that we learned to be careful stewards from our own parents through our awareness of their struggles. In my case, I also grew up having a lot of sayings and proverbs drilled into me:
- If you take care of the pennies, the dollars will take care of themselves.
- Money doesn't grow on trees.
- If you're not careful, you won't have two nickels to rub together.
- A penny saved is a penny earned.
- 100 pennies make a dollar
I do think songs and sayings are a good way to teach, but you also have to show you apply the intent of said songs and sayings to your own spending habits. Do your children see that you take care in your spending? If resources are tight, do they see you buy only what you need? Do you always have to buy brand new, or do they see you shop at the thrift store, on Kijiji, and at yard sales? Are you humble enough to take hand-me-downs from friends and family who have items you could reuse, recycle or repurpose? Can you limit yourself to one fashion trend item of the season, or do you have to have a whole new wardrobe as fashions change? Can you delay gratification on a 'want' item or 'must' you have it NOW?! Children learn what they live. If your own habits aren't good, don't expect your children to have better ones.
Some people use allowances to teach their children good money habits. If you choose to do so, you'll still need to be intentional about how you do it. Allowances never worked for us; our kids didn't seem to care one way or another whether they received their 'own' money. Maybe because they always had everything they needed, supplied by us. So here are some thoughts:
- make your children buy their own (video games, CDs, DVDs, food treats, this-year's-latest, non-essential foods, gifts for birthday parties, etc.). They will soon see how quickly the money can disappear and may take greater care in their spending choices.
- ensure that your kids save a set portion of their money every 'pay.' Get them to open a bank account and deposit whatever portion you think is reasonable (at least 10% of every allowance). This way they can see how money saved builds up in their accounts. Some kids get excited about this, especially if they are interested in buying a high ticket item at some point in the future.
- if you are part of a church or faith organization, teach your children to set apart a portion of their allowance as a tithe (again, 10% is a reasonable minimum)
- don't tie allowances to household chores. Yes, it may seem like they are getting paid for 'work,' but in my view everyone who is part of a family and who is part of creating a mess or wearing clothes or eating food, should be part of cleaning up, doing laundry, washing dishes, without being rewarded for it. It is simply an expectation when you are a family member.