Sure-fire Ways to Make Your Child Money Smart (Part 2)

Matthew Imerhion

If you missed the first part, read here.

Find more gold nuggets to help your child get the right head start and perspective about money…

Nugget #7: Free To Decide

From age 7, teach your child to make financial decisions on their own; that means you have to loosen your control on their spending habits. Gone are the days when you would take the money gift Uncle Joe gave to Junior under the pretext of safe keeping. Junior has to learn by experience how to keep and spend his money. Let them make mistakes and be there to correct them, pointing out their oversight and the need for more reflective foresight.

Nugget #8: It’s A Goal!

It’s ironic but the truth is that freedom without restraints will breed oppressive beasts. In this context, the beast might be an insatiable need to get everything they want. That, my dear parent, is not wise or feasible.

Teach the kids to make goals. They want a bike? Encourage them to save for it over the next few months. This is a good opportunity for you to offer that 50% contribution. If he hits a certain mark, he makes a pass to you. You make your contribution and pass the ball back. He heads for the mall, pays for his bike and it’s a goaaoooll!!!. His friends are going green with envy. He worked for it! He bought his bike and it wouldn’t have been possible without you.

Nugget #9: Needs & Wants

Now, he has bought his bike, he wants the new XBox. But he also has a passion for music, especially the guitar. Ask him which is more important to him. State the facts: he could always go over to his friends’ house or the arcade to play video games but nobody is going to give him their guitar to learn how to play. Watch him weigh the information, try to set his priority right and make a decision. Teach him that, ‘wants’ are things he could do without while ‘needs’ are things he cannot live without.

Nugget #10: Shopping Lists & Budgets

Get your child to write a list of refreshments they want, give them some money and tell them to go buy them. They will definitely come back to complain that they could not buy everything. If they already know the prices and are good with their maths, they will know before even leaving the house that the money is not enough. This is where you teach them the importance of writing a budget; an estimation of expected allowances and expenses over a period of time. Now they know how to use their knowledge of needs, wants, shopping lists and budgets to achieve their short and long term goals.

READ ALSO: 7 Things Your Child Really Needs

Nugget #11: Family Activities

Involve the kids in making a budget, paying the bills or buying that new washing machine or the refrigerator sometimes to enable them reason and teach vital lessons. Talk about issues in detail and ask them for their input. For instance, why should the gas bill take precedence over the DSTV bill, their hospital bill over attending the next field trip at school or their school fee over renovating the house. These activities will further imprint financial sense into your child’s mind.

Nugget #12: Get Upgraded

You also need to get upgraded. You need to make sure you are financially wise before you can even attempt to talk to your kids about money matters. Some parents are good at writing restrictive allowances and budgets but they never teach the child how to make money. They might not even have any entrepreneurial sparks themselves, nor model saving or prudence, so, imagine the dilemma.

Also, if you are extravagant, you will not be setting the right example. So, work on it.

Nugget #13: Give to Receive

Yes, this really is not a scientific approach but it does work. It is a universal law that you sow what you reap; give generously and same will be done to you from expected and unexpected sources.

Teach your kids, especially by example, to have a large heart and support worthy causes. This is not to say they should give to every Tom, Dick, and Harry irrespective of their resources, of course. They must apply wisdom.

Start talking to your little Bill Gates and Rich Bransons about money NOW! Time is money, don’t waste any more of it.