Part 1: Ways to Guide a Child to Financial Maturity and Security!
In our last blog entry, “Money Smart Kids Essay Contest,” you learned how your 6th-8th grader could win $2000 by submitting an essay and how important it is for everyone to learn about financial literacy very early on.
If you missed it, take a minute to read it now, because, as they say, a mind is a terrible thing to waste.
The purpose of the contest is to send a message to the children that financial literacy is as important as getting good grades or a college degree. As parents, we have a direct role in this educational process and the sooner we introduce them to the concepts, the better.
Why? Because understanding money and how to manage it is so crucial for their future financial well-being that it is extremely important to get them going early.
This blog is the beginning of a series on Ways to Guide a Child to Financial Maturity and Security!
In this blog we will cover the importance of teaching children early on how to count money and why we should adjust our emotions in how we use it. If you use the following information right now from a child’s early age to the time they graduate from high school they will be financially equipped to make intelligent money decisions. You will find this information very rewarding to you and your children in that it will lead them to be great stewards of their money.
Here are a couple of techniques you can use:
Start early to teach them how to recognize a penny, nickel, dime and quarter – how to count to twenty-five and how to place the money in the machine to get a twenty-five cent bubble gum. Repeat this over time by showing the different ways of coming up with twenty-five cents. Now move to the juice machine and advance to a paper dollar for a container of raspberry lemon orange juice!
This teaches them the worth and the value of money by tying it directly to what it was able to purchase. By mastering this simple technique we are conditioning the children to count, know worth and a little about value.
Another technique is to watch and control your emotions pertaining to money. Be aware that at an early age children not only pick up what they see and hear but also can sense your emotions. Child psychologists tell us that children can sense when things are right or wrong, so just remembering that they’re watching you is tremendously important.
It’s true that “What You See Is What You Get”. In this context, that means is that we need to be careful how we react to when bills are being paid or when we have discussions with ourselves and others about money. We are quick to show them joy or happiness when we spend money on material things but tend to show frustration when it comes to paying bills or when indicating that we do not have money to purchase something they want.
This is the wrong example to set for our kids. This behavior may make it appear that spending is the way to happiness and paying bills is an unpleasant exercise. Is this the message that we need to portray? Just imagine what they would do if you showed them the same joy and excitement when you saved money! What would they likely grow up to do? Certainly, if they saw the joy of saving, often and consistently, they would grow up learning and understanding that saving is a joyous and acceptable behavior which would condition them and prepare them for financial success!
After conditioning our behavior to show them our emotional joy from saving we can now be in a better position to teach them the concepts of money and how to save. From there we can move on to showing them the value of money and then the power of money working for them.
Our next blog post in this series: Ways to Guide a Child to Financial Maturity and Security, we’ll suggestions on the best ways to encourage savings!
Please stay posted feel free to leave your comments.