All parents wish they could gift their kids with hefty trust funds. But while a small fortune leads to a head start in life, instilling money-smart attitudes in your kids is even more important.
Tough times, wise kids
When money is tight, how do you deal with the situation? Do you go into denial and spend freely, praying things will somehow workout? Or do you turn into a worrywart and deny your family any extras? According to Liane Pena Alampay, M.D., development psychologist, your child can easily pick up on your anxiety, and feel this anxiety himself –no matter which end of the spending spectrum you fall under. Here are tips oon how to raise financially empowered kids:
DO make kids feel that they have a choice. “If your sons want an expensive toy, ask him if he would like to have it now as an advanced birthday gift, or wait for his actual birthday.” States Dr. Alampay. “Remind him that if he gets the toy today, he won’t be able to buy a new one later on. If you’re at the supermarket and your daughter wants an imported chocolate bar, ask her if she’d rather have that, or a huge pack of her favorite cookies that will last a whole week.” Let your children weigh their options, and make their own decisions. This will help them feel that they are in control.
DON’T give your child choice you aren’t ready to fulfill, as you neverknow which one he’ll pick. If he chooses to buy the toy now, don’t give him another toy on his birthday just because you feel bad. You can still celebrate his big day with a special yet simple celebration.
DO explain matters properly. There’s no need to talk about the nitty-gritty of your financial situation, but be honest about why you can’t buy a certain toy right this minute, even if your child throws a fit. Dr Alampay shares, “My son once asked me if we were poor when his cousins left for a vacation in Bangkok. I explained that we are not poor, but that we aren’t rich either. I told him we have enough for what we need. I also reminded him that we had just taken a trip to Cebu where we had a lot of fun. We don’t have the budget to go to Bangkok, but we could save up for a future trip.”
DON’T use guilt to get your kids to comply. “Don’t scare them by saying other children don’t even have any food, as this is something they can’t really do anything about at that moment,” states Alampay. “It may also leave them with unnecessary stress.”
DO let them see how money works. “Let your kids use play money,” says Dr Alampay. “When we’re at the mall and my eldest son wants a snack, I ask him to check how much it costs, so I can give him the money to buy it. Sometimes, I give him a large bill so he sees that he gets change in return.”
DON’T shelter them from money matters, or from knowing how much things cost. “Exposing your children helps them understand what is expensive, and what is not,” says Dr Alampay.
Click here to read more about value for money, saving savvy and how to go easy on the budget.