Children and money: 10 mistakes of financial education
How to teach a child to earn and spend? Let's discuss the most common contentious issues.
October 31 - International Day of Savings. Manage money you need to learn from an early age. Why can’t you pay for good grades, evaluate your future salary profession and control all children's expenses? We have compiled 10 adult mistakes that prevent children from becoming financially successful.
Mistake No. 1. Considering money as a taboo subject
If talking about finances is conducted in your family behind tightly closed doors and generally makes you feel awkward, children simply will not have the opportunity to form a correct opinion about the purpose of the money. The result is that adults are already experiencing difficulties in relations with money: they are lost during planning, squandering, or, conversely, groundlessly saving.
Tip. Talking about the family budget is perfectly normal. Of course, there is no need to discuss the size of your salary with a preschooler, but a seven-year-old child should already understand how money appears and is spent in the family. So the foundation is laid for his future financial literacy!
Mistake # 2. Do not give pocket money
Own money is a valuable experience of independence. Psychologists recommend starting to allocate small (depending on family income) amounts to a child from 6-7 years old and do it regularly, once a week or a month.
Tip. It is desirable that with age the share of the child’s independent expenses grows: if at 7 he spends money only on his “Wishlist”, at the age of 14 he can already pay for part of his own entertainment, mobile communications, buy gifts for friends
Mistake number 3. Monitor all children's spending
Of course, when you forbid a child to spend pocket money on nonsense or scold for an already completed purchase, you are driven solely by good intentions: money is not a toy! But it turns out that the money belongs to the child only formally, but in fact he is obliged to discuss all the expenses with you and agree with your options. Such strict control contributes to the fear of error and self-doubt.
Tip. Trust the baby choice. Yes, the first attempts to spend money almost inevitably lead to mistakes, but only in this way you can get the necessary experience and learn how to compare your desires and opportunities.
Mistake number 4. Let it go by itself
It is also not worth it to completely distance yourself from the children's wallet. The child should know that you can always consult with your parents and get support, not condemnation. Help him gradually master the financial wisdom.
Tip. Talk with your child about the important rules regarding money: you shouldn’t carry large amounts to school, you don’t need to talk loudly about your “wealth” or show off money, you should not play gambling or argue for money. If the son dreams of a superconstructor, advise how he can save up on it.
Mistake number 5. Pay for good grades
Psychologists do not recommend using this method of improving academic performance: a child still learns not to please you and make money, but to gain knowledge and sooner or later decide on his own future. In general, this is the student’s only serious task - to study!
Tip. Separate payment and encouragement: it is quite possible to stimulate the student’s success by “rewarding” him according to the results of a quarter or a year.
to the family library
- Children's encyclopedia "Money" from the publishing house "Rosman": stories about how money went from ancient Babylonian "talents" to modern plastic cards.
- Katerina Demina "Children and Money." What to allow, how to ban, what to prepare for ": useful tips.
- Joline Godfrey “How to Teach Your Child Money”: The First Steps in Financial Planning for Children and Adolescents.
- Bodo Schaefer “Dog named Money”: the theory of financial success is presented in a simple and understandable language and is accessible even to babies.
Learn 5 More Financial Mistakes
Mistake number 6. Pay for housework
At first glance, a good motivation: household chores are done, the child is satisfied. In fact, this is a rather insidious way: what if the child decides that you can do nothing, or simply refuse to help for free? By the way, neither mom nor dad pay each other for dinner or laundry: you all live together, which means that you take care of the common house together.
Tip. If a teenager in his free time is regularly attracted to help - to sit with his younger brother or to buy products for his grandmother, you should think about any compensation or additional privileges.
Mistake number 7. To instill the principle of the primacy of money
Between the beliefs “money is an instrument” and “money can do everything”, there is a rather thin line. Yes, often it is financial success that helps a person to feel independent, meaningful and independent. On the other hand, security does not mean endless possibilities or impunity. It is important that with the help of parents, the child understands and makes sure that the attitude towards people should not depend on their well-being, and wealth is far from the only key to success.
Tip. From early childhood, try to educate your child in respect for intangible values. For example, books and films telling about kindness, friendship and mutual assistance, love, and the beauty of the world will come to the rescue.
Mistake number 8. Take away from the teenager everything he earned
Many children from 14-15 years of age find the opportunity to work part-time. You should not take all your salary into a “family pot” - even if your thoughts on how to manage your earnings do not fundamentally coincide. The desire to share can and should be encouraged: for example, after receiving a salary, a teenager can buy refreshments for everyone.
Tip. Tell the teenager about the principles of investing and offer help in drawing up a financial plan: for example, save 10% of what is earned in a savings account. Of course, it must be said about the possible risks, financial pyramids and crises that have affected the country's economy.
Mistake No. 9. Evaluating a future salary profession
Unfortunately, there are many professions that do not involve guaranteed enrichment. But, if the child intends to become a veterinarian or artist, it is worth respecting his choice. The process of making money is important, but not more important than self-realization, satisfaction with life.
Tip. Talk more often with a teenager about his plans for the future: how does he imagine his life after graduation? Five years later? But the most convincing argument is a personal example. If a child sees that their sphere of activity is really important and interesting to parents, they are happy to go to work, enthusiastically talk about their ideas and achievements, their choice will be more informed.
Mistake number 10. Use money as a means of manipulation
The task of pocket money is to lay the foundations for future financial literacy and to make the child feel independent, but this should not become a way to influence his behavior or attitude towards you. The appearance of money should be a predictable process, and the actions of parents should be consistent, not spontaneous or dependent on their mood.
Tip. Let the reward and punishment system be obvious and transparent. Depriving pocket money makes sense for serious misconduct or, for example, damage to family property - in this case, the repair or replacement will be partially paid at the expense of the children.
Elena Bublik, teacher of the course “Fundamentals of financial literacy for students” at Smart Course
Each of us regularly encounters issues of earning, distributing, saving and increasing money, but unfortunately they do not teach this at school. The sooner the child gets these important skills, the sooner we lay the foundations of his relationship with money, the easier it will be for him in adulthood. Financial literacy is needed in order to learn how to properly distribute money, plan expenses, save up, and also get used to responsibility and independence. By the way, its economic development depends on the general level of financial literacy of the country's population!