The 11 Most Important Money Lessons to Teach Your Kids During an Economic Crisis
With the current confusing economic situation in our country and our efforts to cut off on un-necessary spending, our kids might start asking questions that most of the time we won’t know how to answer them. This is a good time to teach them how to value money and how to spend it the right way.
Teaching our kids about finances and the value of money is such a vital aspect of parenting that will help them thrive and navigate life as they grow older and won’t leave them confused. It’s such a pity that schools don’t teach kids the basics of money value from early on, yet we, as parents and caregivers can definitely do this on our own. Speaking to your children about the value of money according to their level from early ages will help them understand the whole concept.
You can start as early as age of four by talking about the essentials of finances. Although they won’t get the whole idea yet, but they will start grasping the basics, such as the idea of spending and saving money.
Here are some tips on how to do so:
1) Game Playing
Play games with your pre-schoolers that involve buying and selling. You can buy one of those lovely toy cash registers with paper money and coins in it to make it more fun.
2) Shopping Trips
Take them with you to a few of your supermarket trips. Give them a list and play around with items, so they fit your already set budget. Let them see how you compensate sometimes so you can work around your budget.
3) Set Priorities
Help your child prioritise. You can create a vision board with him, or simply a list of items he’d like to have and hang it somewhere you can both see every day, like on the fridge for example. Together, prioritise this list from the most to the least important, set a plan and a deadline for the items to be acquired. This deadline could be tied to Eid/Christmas or his birthday, or it could be tied to how fast you were able to save for it. The more you get closer to the set date the list can be modified or edited, as long as it’s still within the budget, and if not, then the deadline needs to be reset accordingly.
4) Teach them the difference between ‘wants’ and ‘needs’
Your job is to provide your kids with their needs, but there is definitely a difference between ‘needs’ and ‘wants’. So, let’s say you’ve set a budget for a new pair of jeans for your kid, yet he/she wants to buy a more expensive one, it’s definitely your right to tell him that the money set is enough for getting a nice and decent pair. Yet, you can make use of the situation and help him learn how to save money if he wants something fancier, by giving encouraging him to save up for the difference between the two pairs.
5) Set a rule for replacing lost or destroyed items
This will be according to your value system at home. Yet, be realistic, you can’t really expect a three years old to look after a tablet and never drop and break it!
However, before you set this rule, you need to sit together and discuss ways of keeping the items safe. You need to set a plan with your kid on how to avoid breaking or losing those items. Moreover, make sure that this is suitable to the child’s age and personality though. If the child is old enough to be responsible for this item, then go ahead and set the rule yet always be consistent once it is set. Breaking this rule could easily turn your child into a manipulative person who persistently nags, whines and acts out until he gets a replacement.
An example of a house rule on replacing lost items: “The child is free to either choose replacing his lost/destroyed item with his own money or not have a replacement at all. The parent won’t buy it twice.”
6) Teach your child about trading and making their own money
They can work to earn money, such as doing art work or loom bands for sale. Also, it may be useful for them to learn to exchange toys with their other siblings/friends.
7) Teach them how to be givers
If your child has more toys than what he can play with, then he is definitely affluent. Try to involve your child in charity work if you can, so he feels he has a duty towards his community. Help him understand that he has enough to give and share unlike others who barely have their needs covered.
8) Don’t always respond to any demand
A few parents would instantly respond to their kids’ demands, justifying it with reasons such as: peer pressure, compensation for their inability to spend time with their kids, fearing that their kids would feel deprived, or that they won’t stop nagging otherwise. On the long run, those same parents complain about their kids’ recklessness when it comes to their money, property and also their ingratitude.
9) Teach them what’s a good value deal
With older kids, look for good deals with them and discuss why they are or aren’t considered a good deal. Teach them not to be blinded by commercials, to learn researching customers reviews first and then compare between different brands within the budget range. Teach them how to compare items’ characteristics; price, specs, features, expiry date or how durable,…etc. Once all this is done, let your child experience the consequences of his decision without rushing in to protect him.
10) Work on your self-control skill
If you set a budget and keep on breaking it, expect your children to always ask for more instead of working within the budget set. If you are entering a shop to buy something in specific, tell your child that this is your only goal for going into that shop and you won’t buy anything else no matter how small it is and stick to that. On other occasions, if you feel you are being generous and you are willing to be tempted to buy unnecessary products, then state that before entering the shop and tell your child the budget for what they can get and also stick to it.
11) Keep them away from the details
Don’t involve your children in the details of your economic crisis or in victimizing yourself by always listing all what you buy for him and asking him to show gratitude. You can definitely tell them sometimes that this item is so ridiculously overpriced, or it looks very interesting and you can add it to the list together and save up for it. Yet, dont over burden them with so much details about your bills and debts so you don’t make them feel insecure and threatened.
In my personal point of view, I see “instant gratification” as the worst ailment that has afflicted our society and those young generations. Everything you want is one mouse click away from you! This has rooted and watered the seeds of impatience, intolerance and ingratitude of what you have along with the irresponsibility and carelessness towards money and property.
Needles to say, practice what you preach. Parents serve as their children’s role models that they look up to. If they are aware of our responsibility when it comes to the way we deal with our budget, then expect them to act in the same manner.
Here are links to online games and apps that can help your child be financially smart such as:
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