Good money habits can take a long time to form but money experts agree that the earlier we teach our kids about money, the better it is for their own future. If you ask why, just think about how your own money decisions have affected your life. There are money mistakes we wish we never made i.e. incurring credit card debt; and there are sound financial decisions, like investing in a mutual fund, that we wish we made earlier.
We cannot turn back time but time is still on our children’s side. It is up to us to save our children from the consequences of bad money habits and equip them with the right skills to unlock their own financial freedom.
Real-life tips to teach children about money:
1. Talk about money – Discussions about money should not be painful. You do not have to be a registered financial planner just to start discussions about money with your child. Remember, money is a reality of life and it is connected to almost everything that we do.
Start by asking your child questions like:
- What do you think mommy and/or daddy does when they go to work?
- Why do you think mommy and/or daddy goes to work?
You might be surprised by your kid’s answers. My son said I work just because I want to and for my own benefit. I took this opportunity to explain the concept of work and money. Plus, how our work ultimately allows us to buy our needs.
Now my son responds better when I say “huwag kang mag-aksaya” (don’t be wasteful) because he knows that we work hard for what we have. Basic needs like food don’t magically appear on the table. He also now respects my work-at-home hours and know better not to interrupt.
If you are uncomfortable talking about money, chances are, and like many of us – your own parents did not talk about it too often with you when you were a child. Here are possible reasons why they didn’t:
- It is “distasteful” to talk about money with children;
- It is a difficult topic because they don’t know either;
- They do not have the time to talk about it; or
- They do not have money.
Are these the same reasons why you haven’t talked about money with your children? Could you imagine what it would have been like if your parents taught you about money at an early age?
2. Give them a job – By 5 or 6 years old, your child has sufficiently developed physically and mentally to perform some chores. If you followed my first tip, they would now know what having a job means and the reward that it offers.
My 6 year old son’s first job is to fix our bed every morning. For this he earns P1 every time he completes the task. This small habit helps him understand the relationship of money, time, and skills. There will be times that your child will refuse to do his or her job. That’s okay too. When they don’t accomplish their job, it also exposes them to the consequence of not earning.
Sometimes, my son tells me at night that he wished he made up the bed in the morning and regret that he did not earn his 1 peso. Mission accomplished!
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