Here is a picture of my daughter’s weekend goals:
Yes, you read that right – learn about Money. Ok, while she is basically referring to her curriculum (basics of currency, notes & coins), I took it as an(other) opportunity to engage with her on a few basic personal finance concepts.
Now she is only 6 years old, but having conversations about money is not uncomfortable or unusual for either of us. This is because making her a financially independent & informed adult is one of my top parenting goals.
Here are my top 5 reasons :
- Money will be an inevitable part of her life – even if the world uses Uber Airtaxis instead of cars!
At the pace at which the world is changing, the focus is not on passing down MY principles and values (the ones which work in our times), but on ENABLING her to make decisions for herself, given the variables of her adult-life situation. Teaching about Money is an effort in that direction – she will earn it, she will be forced to deal with it (spend, splurge, save – do something!) and she will definitely struggle with a lot of ‘noise’ on the subject once she gets to it.
- Teaching her the Value of Work
As a working mother, I dealt with the mother’s guilt syndrome for the first 3 years. But now I take it as an opportunity to discuss the value of work and that earning money requires us to put in deliberate efforts. There is no shortcut to being wealthy or affording the lifestyle that we do.
To enable her in practicing the sense of satisfaction that comes with earning our own income, we have started putting out a chart of 3 chores for her per week (of her choice and our approval) basis on which she will earn her weekly income. Despite being not-so-regular yet, this initiative has helped us discuss ‘action and reward’, ‘happiness of doing our own work’ and also, ‘no getting paid for helping around the house.
- It’s ok to get nice stuff as long as it’s within her Budget
In a generation which is spoilt for choice in any item of consumption – dolls don’t mean having a collection of 3-4 Barbie dolls; Blocks and plasticine are replaced by all sorts of Lego, Kinetic Sand, Slime, Play-Doh, and what not – the lines between Needs and Wants will continue to get harder for her. Working within a Budget – today it is mine, tomorrow it will be hers – will give her a sense of clarity on what really is her definition of ‘value for money. There is nothing confining, restraining, or miserly about having a budget and living with it.
She has already started demonstrating her understanding of budget & value when I take her out shopping and I hear no tantrum, no excuse, no aggression when I refuse that high-priced item. She has started negotiating with me on what her options are, what she really does not have and would like, and how much am I willing to spend. Sounds unbelievable?
- The Joy of Delayed Gratification – Saving up for Something Special
Every financial advisor worth her salt knows that having a clearly defined GOAL makes all the difference in reaching it. Working towards a Goal teaches us to delay our gratification Today for Something Special tomorrow. Our kids need to see the value of holding on. Because they will always have the option of not needing to.
Once we set up the chore activity, the next idea was to link the income with a goal for her. A Hook. Because she adores her dog-sister, I used her upcoming birthday as the perfect excuse. Together we looked up the perfect colorful ball as a gift and defined how much was needed. I took up 50% of the spend – provided she put up her share of the deal. Voila! 2 months later, slow but steady, my 7-year old made her 3rd purchase. (She has already made her first 2 purchases on a gift for a friend and her dad)
- She should have a Healthy Money Story
Money is one of the most taboo topics in families today. Which makes it seem complex, mysterious, uncomfortable. We all have a money story created as young children based on how we saw our parents deal with it – sometimes through arguments, through the uneasy exchange of glances, or worst of all, not share anything about it at all. As adults, that money story defines our relationship with money. If we were deprived of things as kids, we could end up becoming an indulgent shopper, with a sense of ‘ I deserve this. If we saw arguments because of it, we could have found it difficult to discuss money with our partner, treating it as a subject of conflict.
By sharing, discussing, and ideating together, my attempt is for her to treat it simply as a TOOL to help lead the life which gives her joy and satisfaction. I want her to pass on the same story to her next generation, if and when she does have them.
It’s not easy being a parent, especially communicating about subjects that are alien to us as well. But being deliberate in our parenting, to prepare our kids for making decisions in a world we haven’t experienced, is the only real thing we can do.