Children learn from their parents – that is a simple fact of life. So when it comes to money, be extra aware of the messages your words and actions send.
Being a financial role model starts with your own money mindsets and habits. Therefore, it is hugely important to become aware of your own words and behaviours when you engage with your children about finances. The worst you can do is say one thing to them while you do another.
Here are a few tips to get you going (or improve what you’re already doing)
1. Watch what you say.
Very often, your choice of words can be the difference between a positive or a negative outcome. For instance, when your answer to your child’s request for something is always “no, we don’t have money for that”, you convey a message of scarcity. However, if your answer is “let’s look at what else we can or want to do with this money”, you convey a message of choice. This teaches your child that spending money comes down to making a decision and teaching your child the art of making good decisions, is one of the best gifts you can give them.
2. Avoid impulse buying.
Going to the shops with children can be a harrowing experience as you try to get what you need while they want everything they see. It is easy to feel that you only have two options: buy something to keep them quiet or just say “no” the whole time. Neither of these are good choices, so fortunately there are other ways to deal with it:
- Don’t leave home without a list and get your children to help compile the list. If they are big enough, let them find the items in the store. In this way shopping becomes a more focused activity and you teach them the skills and discipline of mindful shopping.
- If your child wants something expensive, make them wait 24 hours before buying it. Tell them if they are still interested in the item after a day, you will take them back to get it. If they forget about it, it clearly wasn’t that important. You can also have conversations about the item to help your child think about what they want and how else the money can be spent. The goal is to teach decision-making skills and delayed gratification.
- Set a limit at events like shows, circuses and amusement parks. Before you leave home, give your child an amount they can spend and then let them decide how to spend it. If they end up with too many cheap toys and not enough to eat, that is another lesson in decision making.
3. Focus on saving money
- Look for specials and combo discounts, and make the most of loyalty programmes. A fun exercise is to write down all the discounts and savings you get during a month and add them all up. Get your children to work with you to beat the number next month – when you make saving fun, it’s a game every member of the family can join. The savings game becomes an opportunity to teach about price comparisons, bulk buying and how to make the most of special offers.
- Highlight money-saving behaviours at home, such as switching off the geyser during the day when no one is at home, and not leaving lights on in empty rooms. Gamify these savings by putting up a chart that tracks your household’s electricity use.
- Agree as a family how to use the money you save. For example, boost your holiday kitty or put it away for next year’s school necessities. Seeing how saving in one area gives you more spending power in another, is a powerful lesson for children (and adults!).
Being a role model is hard work, but also extremely rewarding. Most often, it is more about managing yourself and your own actions than it is keeping an eye on what your child does. Probably the biggest thing you have to be aware of, is consistency. Stick to the agreements you put in place and enforce consequences so that you don’t end up rewarding bad habits.
And remember – make it fun! Too many of us grow up being afraid of money, resenting it and feeling powerless around it. Constructive role modelling can help your children to avoid these pitfalls and instead have a healthy relationship with money.