Despite a clear need, mandatory financial curricula continue to be absent from most primary and secondary schools’ core educational priorities. This means that teaching our children about money, entrepreneurship, and healthy spending habits has to begin at home.
“Train up a child in the way he should go, And when he is old he will not depart from it.” -Proverbs 22:6
1. Teach them about mass consumption.
Watch television and flip through magazines with your children to analyze the role that commercials and advertisements play in encouraging groupthink and mass consumption.
Children and young adults, in tune with much of pop culture, turn a blind eye to the reasons why they buy certain labels at certain times. They honestly believe that they purchase them from their own volition.
If, at this stage in their development, they profess their individuality and autonomy, why then, do many strive to look, dress, smell, and posture in identical manners to their peers? The manner in which they conform—that is what they consider worthy of buying, wearing, drinking, saying, and driving—comes from social cues orchestrated and controlled by seemingly innocuous suggestions and subliminal reminders of what should constitute their external identity and internal values.
2. Identify symptoms of impulse buying and implement strategies to thwart its influence.
Many of us, including children and young adults, experience an increase in heart rate, sweaty hands, and a trance-like state when we are overcome to buy on impulse. While it’s important to acknowledge the sensation, it is of greater importance to implement impulse-related rules of engagement to spare your future of financial difficulties.
Teach your children healthy ways to cope with the desire to impulse buy. Teach them to walk directly out of the store. Teach them to keep all ATM cards and credit cards in the house when they leave home.
Enforce the 48-hour rule: If there is a purchase over $20 that you want to make, think about for 48 hours.
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3. Educate them.
For younger elementary school students (grades K-2), read them books like It’s a Habit, Sammy Rabbit, which celebrates a rabbit who saves his carrots and thus fosters early savings habits.
Books like A Chair for My Mother and Alexander Who Used to Be Rich Last Sunday, which show two children with completely different approaches to saving and spending, are appropriate for older elementary school students (grades 3-5).
4. Set financial goals and expectations for them.
Open a savings account with your children and have them make bi-monthly contributions. Insist that they pay some or all of their bills and expenses, such as cell phone, nails, entertainment, and shopping. This instills a sense of responsibility.
Having them play an active role in their financial lives will also streamline their priorities and help them develop an understanding of the difference between a want and a need, once they’re no longer getting things for free. If you allot an allowance, maintain strict rules that limit advances, discourage borrowing, and create incentives to save (e.g. providing matching funds).
5. Encourage an entrepreneurial spirit.
Our children possess an array of intellectual, artistic, political, and cultural talents, passions, and interests. Allow these predilections to become potential sources of income. Is your child the teacher’s pet? Let invaluable skills such as excellent reading, strong organizational skills, reliability, and congeniality be the beginnings of an educational enterprise for her or him. Is your child particularly athletic, fashionable, or handy? Encourage him or her to train people, design things, or fix things around the neighborhood for a fee.