Parents nowadays still teach their children old money traditional values that their own parents taught them like ‘Save money today, so you will have some money for tomorrow’ or ‘Waste not, want not (don’t waste anything)’.
Today’s society
However, today’s society is known as a “throw-away” society where ‘Buy now and pay later’, are common-place. Instant gratification is also normal, why wait when you can get it now.
Our kids will certainly get confuse when we tell them one thing and they see otherwise. This is because children learn from what they see and hear. So in this situation, a parent has to make extra efforts to instill the correct money values in their children. As always, talking to your kids is an easy and direct way to start. Open and constant communication, one to one, is recommended for effectiveness.
Allowance
The introduction of an allowance can also be a good teaching method. This method allows the child to take responsibility on how to spend or use the money. The allowance can also be given for doing chores or responsibilities around the house. The amount given will differ in every family. Give only what you can afford to give.
Extra income
You can also let your child to earn extra income by doing extra work around the house, garden, farm or during special occasions. This is aside to the normal chores assigned in the beginning. This is called ‘extra income opportunity’ and it teaches your child the idea of working or doing something to earn money. It certainly gives them a better idea on why we need to go to work and earn an income to support the family.
Open communication
At the same time, don’t forget to talk to your children about spending their money wisely. Earning the money is one thing but how to spend the money is equally important. Cover topics like the commercial advertisements shown on TV, the problem with peer pressure, the reasons for saving, etc. Some children may come from wealthier background and can afford more expensive things whereas others may come from a frugal family and hence has less money to spend. Talk to your children about the idea of letting money grow or multiply for future use instead of spending all now. They can learn how to allocate the money for different purposes as well.
The parents play an important role and your children will learn from your parental guidance and example. If the parents show good money habits like saving, chances are the children will pick up the same habit. Therefore, eventually your children will grow up to have good money values picked up from their parents and from what they have learned.
Check out the Carnival of Everything Money for more great ideas.
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Hi Jacquelyn,
As you stated, allowance is based on how much the parents can afford. I am thinking of how much a rich parent should give to her children as allowance. I think it should be a cap right?
What do you recommend? Should our children get the same allowances as the poor kid?
The amount of allowance to be given is up to the parents. I know of rich parents who tightly control the purse string.
What kind of lifestyle or growing up environment is your child exposed to? If the child is used to spending money, for example on comic books, movies or shopping every week, then the parents are expected to fork out more allowance. On the other hand, the poor kid only goes to town once a month needing much less. However if the parents of the rich kid is very stingy or frugal, he won’t get much allowance to spend on as well.
Ultimately, the parents will still be responsible to teach the child about money, on spending or saving habits, etc.
That is so true. Children need to see their parents making a good example. If you tell them one thing and then go out and set an example of the opposite it is sending the wrong message. Teaching children about money early helps build a good foundation.
Hi Lisa, thank you for your comments. The parents are the best example the children can have.