• I was browsing through www.oprah.com the other night and I found this article on the site “Money Lessons for Kids“.   I agree that we should educate our children about money when they are still young.  It’s important that our children understand where and how the money is earned and spent.

• Most parents nowadays are trying their level best to provide and satisfy the material needs for their children e.g. toys, clothes, accessories, mobile phones, vacations, golf equipment, piano, playstation and so on.  Most children do not know how much these stuff cost.  As they get them too easily, they do not know how to appreciate what they have.  Eventually they build a mentality that they just need to ask their parents to buy anything that they want.  For instance, my nephews always demand their father to buy new mobile phone or playstation.  Whenever ask if they know how much these stuff cost, they just shook their head and walk away.  They don’t even want to find out because it’s the adult’s responsibility to purchase them as they are still schooling.  As they are so used to this lifestyle, they tend to become more financial dependent to the adults in future.  Moreover, we are living in a world of advertisements and commercial, they have influenced our children perception about acquiring material goods.  Therefore, it’s critical that parents begin educating their children money management skills.

Money management is important for each individual and family.  If we do not know how to manage money, we are unable to plan our expenses and earnings.  Most probably we spend more than what we earn.  We become broke before month end.  To learn money management, we first need to understand how money works.  If we are able to educate our child to understand money management - earning, spending, saving and even making small contribution to the poor and needy, we are raising up financially responsible children.

We can begin teaching our child about money as early as age 3 in order to foster positive attitudes and habits about money.  Money lessons can be carried out by taking every opportunity in our daily lives, from shopping, paying bills, withdrawing from ATM, banking transactions, cutting out discount coupons and so on.  This also means sharing more time and communicate more with our child.

How to begin our money lessons for our child?

• Talk to our child.  Share with him how we make an earning and how we plan to spend our money.  For instance, we need to pay the school fees, buy food for the family, pay electric bill etc.

• Be a role model as a well planned financial planner.  Take our child to groceries shopping.  Make a list of things that we need to buy together with our child.  Show our child how to make a good choice that can help us save, e.g. buying the same products that are on sales or given discounts.  Explain our purchasing decision to our child.  We can fill up and submit a free/discounted product entry with our child to show him an alternative to save money.

• Set limits and learn to say “NO” to our child.  Do not overindulge our child by providing every material goods that they want.  For new parents, we can’t resist buying things for our new born even though the baby might not need it.  Therefore, we need to learn to control ourselves too.  Buy only goods/products that our child need such as book, pencils and so on.  If the child like to have a new video game for instance, we may teach him how to save his own money for it or how he can make an extra income.  They will learn to appreciate more in this way.  Say no to our child if he demand to buy something that is unnecessary or he already have at home.

• Teach our child to manage his allowance.  We can give a small amount of allowance to our child and teach him how we can use it effectively - saving or purchasing something that our child needs.  We are teaching mathematics at the same time.  We can provide a piggy bank or money box.  When the money accumulated to certain amount, we can take our child to open up a savings account.  Show him the process and let him feel the excitement to have own savings account in a bank.  At times, we may encourage our child to take part of his allowance/savings to spend it on grocery shopping.  We do not force him to follow our wish, but we guide him.  Let him make the decision.  Let him learn from mistake if he made the wrong choice.  All we need to do is stand by him when he needs us.

• Teach  our child good spending values by buying an ice-cream for mommy for instance or join in to purchase a treat for the family.  We also teach our child how to donate part of their savings/allowance to the needy or poor.  This way we are fostering the values of helping others and doing kindness to help others.

Teach our child about money in a fun and supportive way.  We need patience and consistency in order to educate a child with money management skills.  At the same time, we are strengthening our relationship with our child if we are being supportive and encouraging.

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