If advertisers can successfully target children from birth with spending messages, then moms, dads, and teachers can and should be doing the same with saving and smart money management messages. Where should moms, dads, and teachers begin?
Start With Yourself
First, start with yourself. Improve your own understanding of personal finance and set a good example for your kids to follow. Nothing will provide better results for children than living your stated values as consistently as you can. Here are some steps you can take to increase your money knowledge:
- Read books and magazines on personal finance. Find one that speaks to you. One of my favorites is The Way to Wealth Benjamin Franklin. Other good ones are: Rich Dad, Poor Dad, Robert Kiyosaki; The Millionaire Next Door Dr. Thomas Stanley; The Money Diet, Ginger Applegarth; Dollars and Sense for Kids, Janet Bodnar; and Yes You Can! Raise Financially Aware Kids Jack Jonathan.
- Visit money related websites online like the Motley Fools for example.
- Join a variety of money related discussion groups or form your own so you can exchange and bounce ideas off of others.
Define Your Values
Second, define the money values you want to communicate to your children and choose the language that reflects those values. It amazes me the things people repeatedly say about money, many of them seem to be unconscious. I think you can count on kids to mentally record these messages, in addition to picking up on our behavior. I further believe these messages, verbal and nonverbal, will shape and influence kids thinking and relationship with money. I don’t know about you, but I still have tapes running in my head of things my parents and grandparents shared with us on money and other subjects. As far as I am concerned, one of the best things you can do is to consciously take charge of all your money communication. Interestingly, studies routinely show parents shy away from or defer discussing money with children. This is a gargantuan mistake. Because not only are kids’ minds like sponges absorbing everything we do or say but, they are being constantly and unrelentingly communicated to by advertisers. Here are a few suggestions to help with defining your money values:
Write down your core money values with your partner or by yourself. I find writing things down helps to clarify my thinking and communication. My parents routinely shared with my siblings and me, “we do not spend more than we make.” This was the inspiration for our song with the same title. My father also regularly encouraged me not to mortgage my future or become a slave to credit card debt. My favorite thing my parents communicated to me was that even though we didn’t have very much money, we could have or get anything we want if we were willing to work hard to get it. For some reason, I found that very empowering. If you are having trouble with money sayings go online and check out Ben Franklin. Ben had tons of timeless money sayings like: “Lost time is never found again,” and “Dig your well before you are thirsty.” Ben wrote extensively on frugality. I find the word frugal fascinating, particularly when it comes up in conversation. Although I have no records regarding this, it has always seemed to me people with fewer resources tend to discuss frugality more negatively than those with resources. Being frugal is prudent. It is wise. It should be talked about with esteem. Check out the book referenced earlier, “The Millionaire Next Door.” It devotes a whole chapter to the subject and found this was a key trait of those with lasting resources.
Once you have identified and agreed on your core family money values take time to figure out the language that appropriately communicates those values. Your language will depend on the age of your children. For example, if you want to encourage kids between ages 3 and 8 to make a habit of saving and investing, instead of saying “pay yourself first,” you might share “saving is a great habit” or something to the same effect. The main point here is to figure out what you believe about money and make a deliberate effort to communicate and integrate those values into all your communications and behaviors as consistently as you are able to. A couple of my other favorite money sayings for kids are: saving makes me strong, change adds up, from every dollar, save a dime. Also be sure to initiate dialogue about dreams, goals, homeownership, investments, etc. Try to make your communications short, memorable, and easy to repeat.
Vary the repetition and delivery of your money messages. Challenge yourself to find fun, creative ways to share your money values in addition to verbally repeating them. You might post them on the refrigerator or somewhere in the car. You might turn your message into a song or a rap.
Don’t expect miracles in the short run, although you may experience some yourself as opposed to your children. But as I shared earlier, I believe your voice and values will eventually surface in your child’s life.
Get Your Kids Involved
Third, get kids involved. Take advantage of natural opportunities to involve kids in money-related discussions. Here are a few:
- Shopping, budgeting, list making, coupon cutting, recycling, bill paying, and bank statement reviews.
- Games are another way to encourage interaction. Collect, count and sort coins together. You can create a family savings bank. I still remember sorting and counting coins with my parents on our living room floor.
- Encourage your kids, of all ages, to keep a dream/wealth journal.
- Make sure each of your children has their own savings account.
Start Early and Keep Adding
Fourth, start early and add concepts along the way. As stated earlier, whether we like it or not, kids are being targeted and bombarded with spending messages from birth. What can parents do?
- Limit your child’s exposure to television and radio. These are advertising not entertainment devices.
- Expose children to books and music about money early and often. Naturally, I recommend our books and music, It’s a Habit, Sammy Rabbit!, Sammy’s Big Dream! and Mission 1: Celebrate Saving! Additionally, I suggest: Lucky the Golden Goose; Alexander, Who Used to be Rich Last Sunday; Tops and Bottoms; The Giving Tree; and The Trouble with Money. For older kids, I love Chad Foster’s “Financial Literacy for Teens,” and David Bach’s “The Automatic Millionaire.”
- Introduce and associate the concept of saving with money. Kids need to know that money has other purposes besides consumption. You can do this by practicing everything mentioned previously. Saving money has lots of benefits. Just a few are: saving money prepares us for both emergencies and making our dreams come true; saving better positions us to help others as well as ourselves; saving money allows us more choices and freedom; saving money protects and prevents us from poor spending choices; saving money gets our savings to grow and earn interest; saving builds confidence and esteem; and saving is tangible evidence that the future is important.
- Encourage children to have goals. It has been my experience kids with goals and a purpose tend to be more focused in their spending. Share with kids that the same is true with money, every dollar should have a mission and a goal.
Education is a process, not an event. So you will need to repeat yourself with frequency and of course introduce additional money concepts, like investing, smart spending, compound interest, credit, etc., as children are ready for more.
In summary, the key strategies to helping children develop money-smart habits are: setting a good example for children to follow; communicating consciously and regularly with them chosen money values; involving them in engaging money-related activities; and starting their money education early.
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