Teaching My Kids the Truth About Money

Helping our kids learn to manage money well

By Elvira Tan | 28 November, 2017

Many of us have a variety of reasons as to why we are naturally inclined to giving nothing less than the best to our children. If we have had a cushy childhood, we reason that we must give our children no less than what we received. While some of us who might have gone through a rough time growing up, are driven to protect our children from any form of hardship or lack - we end up over-compensating and lavish our children with everything their little hearts desire, and this breeds a sense of entitlement in them.

Thankfully, my husband and I spotted a sense of entitlement in our first-born early on, during his kindergarten years, and we immediately talked about where we had gone wrong and what we should be doing differently. He is a pre-teen now and we are grateful that he has learnt to be prudent in his spending, saved some money and is able to delay gratification.

Here are some things we picked up along the way to help our kids have a healthier perspective on money matters.

Understanding the value of money

Learning from our experience with our first-born, we did things differently with our daughter from the time she was about three years of age. We would equate various things she wanted with an item that she liked. For example, my 5-year old daughter loves getting these little eggs with toys in them which are priced about $2 each. As such, whenever she asks for a new toy that costs for instance, $20, I’d tell her that the toy costs as much as 10 of the eggs. I would show her the rows of eggs in the supermarket to illustrate it to her when she hadn’t gotten familiar with numbers yet.

We also seized opportunities to get the children to complete chores around the home to earn some credits or money. We felt they needed to know that hard work and effort goes into making money in order to purchase things they need or want.

“know that hard work and effort goes into making money in order to purchase things they need or want.”

Delaying gratification

My husband and I also have learnt to say no to requests for things from time to time, even when we can afford to say yes. We also tell the kids to put the item on their wish-list for Christmas or the next birthday – this gives the children a chance to learn that the intense feelings of wanting something very badly can fade in time. When kids are given opportunities to delay gratification, they get increasingly in touch with what they truly like and won’t just settle for less than what they truly desire.

Exercising prudence in purchasing

We also have a guideline that states that we do not buy multiples of any item unless it is necessary. If we want something new, it has to be a replacement for an item that we need that has since broken down or we are prepared to give away. Better yet, if there is a pre-loved item or hand me down that would meet our needs as replacement, that would be ideal.

We also share with them that we If we need to get something but don’t need it that urgently, we save for it and don’t just go out and buy the cheapest item as a stop gap measure.

Doing their homework before big-ticket purchases

Shopping for a big-ticket item becomes a bit of a family activity intentionally. Research is done together. We encourage our son to read up on as much as he can and speak to as many people as he can when he wants to purchase a big-ticket item for example, a pair of basketball shoes.

We’ve shared with the kids that the latest series of any item might not always be the best. We look at functionality and product performance reviews. We don’t believe in following trends blindly and we strongly encourage our pre-teen to do his research on product information and best deals before making any big- purchases.

“do his research on product information and best deals before making any big- purchases.”

Experiencing how money can be used to bless others

In addition to research, my husband and I sometimes explain our thought processes behind our purchases to help our children understand why we have come to certain purchasing decisions. We tie our decisions to our family values. For example, if we decide to have one less family vacation in the year because we have decided to donate to a charitable cause instead, we don’t keep it under wraps but share those decisions with them.

“decide to have one less family vacation in the year because we have decided to donate to a charitable cause instead”

We seize opportunities to share that money is to be spent in a wise manner, to be saved and to bless others with. When children understand that money is not purely for self-consumption and are educated on how it can should be used to bless others, they inadvertently become less egocentric in the way they manage their own money.


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