We’ve heard it before, and a hundred times from the innocent mouths of babes: “But it’s MY money.” “I WANT that”… After the last lemon was successfully squeezed, and every quarter counted, the kids and money madness begins.
As parents, we have the influence to shape our children not only with the idea of how to be young entrepreneurs, but also the smart mindset that goes along with money.
Starting kids young is the key to a healthy relationship with money. It is during childhood that we begin to become influenced by our parents attitudes toward money: is it we never have enough? Do we “just charge it?” Or, are we working two or more jobs because we have to earn more to afford what we think we need? The Joneses can be a financial firestorm.
I recall hearing a story about a now-grown young lady who spent every Saturday shopping with her mommy. Together, they’d bond over pretty dresses, leisurely lunches, an accessory indulgence here and there, or a little splurge on something sparkly. No matter what it was, the purchase routine was the same – mom would pull out a credit card and the 8-year old daughter would use “her” credit card to “buy” the treats. The child’s card was an expired card that her mom gave her to play with and just like mom, she kept hers housed safely in a sparkly pink wallet tucked in her doggie-shaped purse.
From this tender age, the mindset was planted that the money never ran out. Why? Because while the card was tangible, its value was intangible. Unlike cash, where we can see, feel and hold currency, a credit card gives us power without the immediate risk. When you have ten dollars in your wallet and spend ten dollars, you have no more money. Much like the post-holiday season bills that come mid-January, bad money habits will not just sneak up on you, but will hit you like the northeastern Blizzard of ’78. Not so with cash. I know I don’t have to expound on that idea too much.
So, what can you do to help your child learn about the value of money and create financially fearless kids? Let’s back up to the lemonade stand. Your kid wants to make lemonade and make money. Where do you begin? You can simply break this down into steps:
Give Timmy $10.
Go to the grocery store so he can buy lemons, sugar and plastic cups. Timmy will see that from the starting point of $10, he probably has about $4 left in his pocket. He needs to make six dollars just to cover the cost he spent on supplies. Sounds so simple, but when kids are part of the process, they learn to value the dollar. This, as opposed to just picking up the supplies without for him, he will soon see that it costs money to make money.
Next, let’s presume Timmy has sold out of lemonade for the day and after recovering his investment of $6, he ‘made’ $25. What will he do with the extra $19? If he’s like most kids, he will want to spend it all on the much-anticipated new toy. Or perhaps he wants to buy ice cream. This is where your influence comes in– before lemonade stand day even takes place.
Temptations and Influences
A commercial comes on during a Saturday morning cartoon and suddenly a loud and distinct “I WANT THAT” echoes from the living room. Yes, commercials for toys are in full swing, tempting and baiting young minds, screaming “buy me, buy me now!” Your child is hooked and relentless. What can you do?
Having a tangible wish list on the side of refrigerator is helpful so the child can easily add their “wanted” toy to the list. Then, when they have earned the money from chores or allowance or, saved from birthdays and holidays, they can then have a focused rather than impulsive purchase. This has helped in our house many, many times.
Related read: Helping Your Kids Set Smart Goals
When my child had enough money in the kitty for that “special” purchase, she was able to recall how hard she worked to earn the money and, how disciplined she was to not spend the money on a whim. She planned, saved, then purchased what she really wanted. And, when she did make that purchase, she now had a connection that extended beyond just ‘getting’ something.
As you can see, how we approach money directly influences our children. Starting young or, if we’ve not been the best Suze Orman’s in our own lives, we can certainly help our kids begin a road to financial prosperity. There are a number of great bloggers, websites and programs geared toward kids and teaching them financial strategies. I like Money Savvy Generation; it is full of great articles, tips, techniques and lessons.
Related blogs and websites:
Another great initiative is the FETCH! Program, held each fall nationwide. If your child’s school doesn’t have this program on its radar, it’s worth a call to explore.
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