Your children are watching you, and you have the power to affect their financial skills through your own behaviour. But how do you become a positive financial influence?
It is normal to struggle with your own economy, even as a parent. The important thing is to show your child, the valuable things about setting goals, saving and spending. At ERNIT, we often experience parents that are eager to teach their children about the value of money but struggle to find the right way to do this. We want to help.
Educating your children through your actions is about more than just telling them how much things cost, or answering questions such as, “are we rich?”. It is about being a positive example: paying your child’s allowance according to your agreement, saving for purchases and avoiding over-spending.
“When you repeatedly teach your child proper spending, saving, and giving behaviours until those behaviours become character traits, you are ensuring the future success of your child.” Dave Ramsay, co-author of Smart Money Smart Kids, 2014.
Most people have, at some point in their life, copied some behaviour from their parents. This could be adapting your father’s cleaning habits or your mother’s taste in music. As Rachel Cruze, co-author of Smart Money Smart Kids, 2014, explains; if you experience your parent saving for a goal and finally buying it, instead of making impulsive purchases with your credit card, then you will probably do the same.
“Having your children save up for big purchases – and giving them the chance to see you do the same – teaches invaluable lessons in patience and goal-setting.” Rachel Cruze, co-author of Smart Money Smart Kids, 2014
Teach your child valuable lifelong financial skills by including them in your spending. This could be by talking about your own wish and how you are saving up for it. Or it could be as simple as taking your child grocery shopping while explaining your budget: A ‘boring’ activity that should never be underestimated in the sense of a child’s financial teaching experience.
By making sure that you follow your own guidelines and includes your children in the teaching experience, you will have given them some very valuable tools to have a healthy economy throughout their life.