How to teach kids about money - Ana Pereira
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How to teach kids about money

Have Children they tell you! It’s fun, they tell you! But they forget to mention the part where you will never again have privacy, be constantly tired, and Wiggles, Peppa Pig, or Bluey on repeat!

Despite the sleepless nights, I still agree that becoming a parent is one of life’s greatest joys. It’s also quite possibly one of life’s greatest challenges. And most of the time, it feels like you’re walking on eggshells, and no matter how many parenting books you read, you can never get it 100% right.

Teaching your kids about how to handle money

From the moment they are born, we immediately grow this overwhelming desire to not just fiercely protect them but give them everything, teach them everything and make their every dream come true. We begin to visualize how we will teach them to walk, ride a bike, cook, help them buy their first car, and begin to make plans for how we will pay for their education.

As a parent we make it our job to teach our kids everything, forgetting that they too are teaching us as-well, perhaps more than we even realize.

We hope to instill values like respect and honesty and value family, food and understand the value of money.

We inherit our perspective and beliefs about money from our parents, who inherit their parents’ beliefs. Personally, for me, I wanted to ensure my children would not inherit my old money beliefs.

So I decided to change the traditional approach and rewrote the rules around how my husband and I would educate our children on the subject of money.

So below are the principles I follow when I teach my kids about money.

#1 Value your Time.

I teach them to value their time over money. They need to understand and build deeper respect for their time. They can always make or attract more money but can’t buy back time.

For this reason, we don’t believe in giving them pocket money or money for chores. My philosophy here is that no one pays me to make my bed or clean up after myself, so why attach a monetary reward to tasks that they won’t be paid for when they are adults?

It creates a false sense of attachment that only money will get them what they want.

I would rather they grow to appreciate that spending their time on a task gets them the reward they want. Instead of monetary rewards for chores, we keep a Time Currency chart.

In their rooms, they each have a list of tasks or chores I’d like them to do that week, and in our pantry, they have a list of rewards that cost a certain time currency. Each completed task from the list earns them 10 minutes of time currency.

When they complete their tasks, they draw a heart next to their name on the whiteboard. That’s how I know they completed the tasks and earned their time currency for the day.

#2 Speak the truth

I always tell them the truth about money because there is a difference between currency and money. It’s not just coins and notes or plastic cards that you tap on a machine or digits on a screen – It’s a form of energy, it’s abundance.

  • I teach them the difference between ASSETS vs. LIABILITIES.
  • I teach them the meaning of financial terms such as mortgages, loans, credit cards, taxation.
  • I teach them the history and origins of money.

We have conversations about what these words mean, and I give them examples of how these words are used in real-life scenarios. Make the story relatable to something they are interested in or something you know they would be interested in.

#3 “Mistakes are proof you are trying!”

I want them to learn to be comfortable with failing, losing, and disappointments because most people hold back from achieving or even reaching for the things they want because they are too afraid to fail. Our fridge is usually covered in inspirational quotes about how failing is ok and part of the process.

I don’t ever expect that they won’t be upset or angry at themselves, but they have a visual cue that it’s a feeling that is ok to have and that it’s part of the life experience.

Use analogies of familiar experiences like “Well, did you learn to bike ride overnight? Did you learn to read overnight? No, it took practice, patience, and persistence.”

#4 A love of learning and the difference between value and quality.
I try to instill a love of maths and a love of learning and the difference between value and quality. So we often have conversations around math, and on long drives, I give them spot quizzes.
On shopping trips, I take the opportunity to teach them the difference between a product that is of value vs. a product that is on sale or is cheap.

For example – Eggs. I explain that although caged eggs are cheaper but are not ethical. FREE RANGE or ORGANIC EGGS are produced in a better environment and therefore (in my opinion) worth the $10 we spend on eggs.

#5 Planting the seeds for entrepreneurship through stories.

I teach them how to start a business and what is involved in creating a business. An example of this is our Lemonade stand story.

One day my daughter came up to me and asked for canteen money. I told her rather than just giving her the money; she had to develop an idea for how she would make money. A few hours later, she returned, saying she had a plan.

She wanted to use the lemons from our lemon tree and a cup of sugar to make lemonade and sell it to neighbors passing by. I was so proud that she came up with the idea herself and thought of using up all those lemons we had in abundance!

I took the opportunity to expand her view and teach her about starting a business. Rather than telling her how it’s done, I wanted her to think for herself and asked questions instead.

“What else might you need besides lemons and sugar?

“How much will you sell the lemonade for?”

“How will people know how much it costs?”

“How will you keep it cool whilst outside?”

I wanted her to formulate the idea for herself and realize how much was involved in setting up a simple lemonade stand.

Since this day, we continue to refer back to the Lemonade story when talking about financial matters, like explaining what Superannuation and taxation are. They need to understand how to grow a business from a simple lemonade stand to a worldwide franchise like McDonald’s or Coca-Cola.

Children learn best through watching us, so I try to be very mindful about how my kids hear me talk about money and the conversations I have with my husband.

For example, try to eliminate saying “We can’t afford that..’ instead, ask, “What would it take to make it happen? How CAN we afford it?”

When it comes to money, I believe one of the greatest values I instill within my children is always to stay curious. Be open to learning and be open to understanding how and why other people have different opinions and then come back to yourself, listen to your heart, and trust your gut feeling on what will work for you.