RAIS­ING KIDS WITH FI­NAN­CIAL

CityPress - - Business -

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.

PHOTO: ISTOCK

RE­AL­ITY CHECK When chil­dren re­ceive pocket money from a young age, they learn to in­de­pen­dently save up for things they want

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.