RAISING KIDS WITH FINANCIAL
Today, I have been a mother for exactly 16 years as, this year, my son’s birthday falls on Mother’s Day. The essence of being a mother is to put your children first, so today is all about his big day. No breakfast in bed for me, although I did hint that I would love a pair of fluffy winter slippers. When you become a parent, you are faced with the reality that you have to form a value system in which you wish to raise your children.
In a world that has become so increasingly materialistic and where people are judged, not on the content of their character but on their exterior image, how do we raise children to be financially sensible and to appreciate how much they have?
Upon hearing that I was buying my son a cellphone for his birthday, an acquaintance asked me: “Are you getting him an iPhone?” No, I am not buying my 16-year-old son a R13 000 phone. But the reality is that some of his friends do have iPhones. Then again, some do not. My son is not particularly brand conscious, so it is not an issue, but if it was, that is the sort of thing he would have to buy for himself.
If I raised a child who believed that his whole social wellbeing depended on the type of cellphone he had, I would have failed my own value system.
Then again, my younger son told me last weekend that he “needed” the latest PlayStation because the game he played with at his friend’s house was only available on that platform and not on his Xbox.
I just laughed and said: “Really, need?” Fortunately, I did not launch into the “you spoilt child” speech that was forming in my mind because my son understood exactly what I meant. He understands the difference between “need” and “want”, and why that matters.
I have found that the best defence against so-called peer pressure and children’s demands is to bring them into the real world when it comes to money.
Most children have no real idea of what things cost relative to the income coming into the family. They also have no idea of how much it costs just to live each month.
I don’t have all the answers. Only time will tell if the financial education I impart to my children will bear fruit one day. But I have formed some sort of plan and value system, and so far my children seem to be on board.
It’s okay to talk about money
We talk openly about money and finances. My children know we have a budget and what we are budgeting for. For example, my sons know that this year our goal has been to replace our old car (and that we only buy cars with cash), so other luxuries will have to take a back seat.
We set limits on how much we will spend in total on birthdays, including the gift and party, and only pay for one additional extramural per school term, so they have to choose carefully which activity they want to do.
They are hardly deprived, but setting limits creates the awareness that money is a finite resource and that they have to make wise decisions on how it is spent.
My children received pocket money from a young age and, because of this, they learnt to save up for things they wanted. Probably the best lesson they have learnt is that by the time they have saved up for an item, they no longer want it – their interests are short-lived. As a result, they have more money saved. As adults, too often we are still paying off our credit cards long after the enjoyment of the new purchase has faded.
What children really want is financial security
Living beyond your means to give your children a lifestyle you do not have is not a gift; it is a burden. Believe me, I was raised in a household full of financial stress, so I know that children can feel stress in a home. And it will create negative money memories for them so that in adulthood they may inadvertently repeat the pattern. Showing your children you are in control of your finances is the best way to make them feel safe. Share with them how money in the household is allocated and allow them to have some input into the budget allocations. It will make them feel empowered and also make it easier to have the conversation around “wants” and “needs”, and how they can work towards their “wants”.
Part of that security is making sure I have sufficient insurance in place to provide for them if I am unable to contribute to the family financially. I have also worked at putting away money for my retirement so that I do not have to depend on them in old age.
Leaving a legacy
My father died when I was young and we were left in financial dire straits. There was no inheritance or financial legacy, but I did receive a good education. That was invaluable and has allowed me to build my own future. We have one financial priority when it comes to our children and that is providing them with the best education we can afford. But afford does not mean taking on debt or neglecting our savings; it means making financial sacrifices like not driving new financed cars.
REALITY CHECK When children receive pocket money from a young age, they learn to independently save up for things they want