Money and the Next Generation
Money & the next generation!! It’s never too early to teach your children about the tool of money.
Teach them how to work for it and they learn pride and self-respect.
Teach them how to save it and they learn security and self-worth.
Teach them how to be generous with it and they learn love.
– Judith Jamison (1943), African-American dancer and choreographer
What are we teaching our children, the next generation?
There’s a list a mile long of things we teach our kids. We teach them to speak, to crawl, to walk. We will teach them the names of birds and animals. Hopefully some of us will take the time to teach them manners and morals and empathy. You may call some of these things “just being a parent”, but really you are teaching and broadening your child’s imagination and general knowledge and know-how. And who knows, maybe they will go on to win Who wants to be a Millionaire? at the tender age of sixteen. If that happens, you want to have them prepped.
So, let’s ask:
- What is the next generation learning about finances?
- What are you saying to your children about money?
- What do they see, hear and feel when it comes to money?
- What is the legacy they will take forward in their lives?
A good place to start, is to teach your child to focus on the choices one has when spending money. If you are saving up for a holiday, explain to your children that you are not going to be eating out, for example, because you are putting that money away for the holiday.
Having a clear goal that you are working towards as a family is both rewarding and empowering for everyone involved.
Children need to understand the reason behind spending money. Teaching them, the next generation about abundance and money management is one of the best gifts that you can give them!
Regular pocket money is a valuable aid for teaching children how to be independent. Working out how much money to give a child can be a daunting task. Often, this will be determined by how much disposable income a family has. As a rule of thumb, and bearing in mind that pocket money and allowances should be realistic, you should work out a budget and explain to your child how you have reached a pocket money figure. Teaching children to make choices is a vital part of growing up.
It is a good idea for young people to start saving for their own car as it teaches a better financial lesson than if parents simply buy one for them.
Parents should also talk about money (not necessarily specific sums) and financial planning in front of their children as kids who grow up in environments where they are not encouraged to talk about money often struggle to do so later as adults, with their partners. Show your children love, don’t try to buy it.
The FIVE essential lessons:
Ages 3 to 5: Learning Values
Start with a money box or savings jar. Have fun together creating a home made savings jar, beautifully decorated by your child. Over time, they can add coins to the glass jar and experience the joy when they see how the coins add up. You are planting the seed of savings as a number one priority. It is never too early to learn to save!
Ages 6 to 8: Time for Pocket Money
Weekly pocket money works best, it allows them to start the journey of deciding what they wish to spend their money on. They can also save up for something they really want. At this age it is helpful to be able to see the money in some place like a piggy bank, rather than out of sight in a real bank. There are many different ways to ‘hand over the money’. A friend of mine used to give her daughter R 50.00 at the start of the week and if her bedroom was messy they would deduct a little bit. If she helped with the dishes after dinner, they would add on a little bit. She learned about earning, the possibility of abundance and being blessed with a little more, but she wasn’t just given money.
Ages 8 to 10: Grow Savings
It is a good idea to teach your child to save 50% of all the money they receive. Let them set their own goals for their saving. Let them create their own “wish list”. That way, you are not giving into instant gratification demands, but teaching them that they dreams and wishes, can come true. A valuable life lesson!! They may have short term and long term saving goals, so they can split the 50% savings between the two. That way, they have the wonderful sense of accomplishment when they achieve a short term goal and they are also building funds for the longer term. Very, very useful life lessons for the future. Let them be responsible for budgeting, tithing or giving and spending the rest after saving.
Ages 11 to 12: Bills and Saving
At this age, children can start to understand about family bills that have to be paid on time. Allow them to review their savings goals. Let your children enjoy the experience of having their own money in savings. At this stage, you may get more specific about which expenses their pocket money must cover.
Age 13 to 15: Budgeting and Investing
Help your children draw up a monthly budget for the things they need, the fun things, and their saving goals. They may be ready to start looking at earning interest on their savings, teach them about how they can get their money working for them. You can also show them how to keep a record what they spend. At this stage, you can be more specific about the expenses that their pocket money will cover. For example, buying a gift for a friends birthday. This is the moment and time that you can empower your children to learn about the world of opportunities to earn, save, give, spend and invest!
Prosperity consciousness is the awareness that all of us have something of value
to offer, and we all deserve to get paid for what we provide to others.
– Peggy McColl
One of my favourite quotes:
The greatest gifts you can give your children are
the roots of responsibility and the wings of independence.
– Denis Waitley
Let’s set the next generation up to win the game of money!
What will you do?
To your abundance and theirs