I was with children between the ages of 6 and 9 yesterday and it was interesting how excited they were about the concept of money. They asked so many questions and they listened eagerly as I gave them answers. Children are always open to learn a whole lot if we are ready to teach them. As parents one of the most important things you can instill in your child(ren) is a sense of financial responsibility. We need to begin to make it a priority now more than ever before because if you don’t teach them they will fill the gap somewhere with any garbage that comes. A very basic message parents can share with children is that financial decision-making is about making choices. Parents who are intentional about how to make choices among many options have a better chance at being successful in helping their children develop the practice of active decision-making. It’s interesting to note that a little effort can pay off big time as these lessons are likely to be carried into adulthood. The next question I believe many will ask is, “how do I go about teaching children about a topic as serious as money and financial freedom?”.

 Look for Teachable Moments

There are hundreds of opportunities to talk about money. Whether you are out shopping, watching television, running errands, paying bills, or buying gas, you have a chance to teach valuable lessons to your children. Take time to engage your child(ren) in the process by explaining what’s happening, asking questions, and answering their child’s questions. A teachable moment can be as simple as letting the child know that if they spend all their money at the fast food restaurant, then there won’t be enough money to buy a much needed action figure bicycle when you go to the store later that day or week. It won’t take long for the child to understand that once the money is spent that other items cannot be purchased. Soon, the child will begin to prioritize what is important to them without parental coaching.

Involving your older children in your decision process can provide valuable lessons. Help your older children learn to be savvy decision-makers by helping you identify sales and better prices. Another way to measure your child’s understanding, correct misconception and to reinforce valid observations is to request for their observations about banking and credit processes. We, however, need to know that the most valuable learning moments for children are those of their parent’s financial management practices. Therefore, a great place to start in teaching children financially intelligence is to become financially responsible role models. Let your children see you as someone who is in control of money and not one that money controls. Take charge!

Use Current Events
Some parents avoid discussions about the economy and finances in front of their children out of a fear of making their children anxious. Talking about it may actually decrease children’s anxieties. Never shy away from discussing the current state of the economy; just find a way to reach the child on their level.

It is important to talk to children if a friend or relative has lost a job. Explain why this happens and talk about any anxiety the economy may be causing for the children of the friend or relative. Also discuss how deployment impacts a family’s finances and relieve children’s fears, if any. Always ensure you talk about changes to your family’s finances and the adjustments that will need to be made, if any.

Family Engagement
Families should look for ways to save and budget together so that children can learn by contributing to the development of a healthy spending plan. You can ask your children to come up with new ways to save money in the house. For example, you can ask them to look for better deals on normal day to day purchases; you’ll be surprised at what they will come up with.

You can also decide to give your children allowances in exchange for chores. This can be done by assigning a monetary value to certain tasks in the home so that even very young children can begin to understand the consumer process. (This is a bit controversial though; we will talk more on that subsequently). Parents should also be encouraged to help their child manage their money by supporting their saving for goals, which teaches the lesson of being rewarded for saving.

Making intelligent financial decisions a part of the daily family conversation is an excellent way for parents to encourage this responsible behavior.

Do have a great week!

Picture Credits: Image Source/Corbis

– Gbonjubola Sanni