DOWNLOAD: BTparent Series PART I
Modeling Smart Money Habits at Home
Today’s kids are growing up in an era of relative economic prosperity. As a result, they:
- Have money and spend it. But who teaches them how to limit their spending or how much to save for the long-term?
- Watch parents use ATM’s – magical sources of money. Who brings home the hard lesson that earnings make those withdrawals possible?
- Use their parents’ credit cards or have their own. Who teaches tweens and teens that plastic transactions create debt? That debt eventually comes due.
- Are impressionable, easy targets of the marketplace. Who helps kids judge when they have enough? Who helps them distinguish between needs and wants?
- Are tech-savvy enough to bank online. But there’s more involved than wielding a mouse. Who explains the basics of earning, saving, investing, debt, and spending? Who teaches teens how finance charges or interest rates can add up? Who shows them how to keep track of their checking accounts?
Too often the answer is “no one”. Annually, $tart Coalition for Personal Financial Literacy measures the nation’s 12th graders’ knowledge of personal finance. Since 1997, the overwhelming majority of students have failed the test. Yet with each passing year, kids are breaking spending records.
Our kids can tell us all about the “latest” and the “hottest” in the marketplace. They are steeped in advertising. Yet research shows that they know very little about handling money. For example, according to one survey, huge numbers of the nation’s kids don’t know they should pay more than the required minimum on their credit card balance.
If kids carry such habits into adulthood, they are going to be making mistakes that have serious long-term consequences. One consistent result in the $tart Coalition survey cited above is that students say that they learn about managing money “at home from my family”.
During January – March, 2017, the theme for EFBC’s Building Together Campaign is “Building Together is for families too!” As a part of that emphasis, a series of articles on teaching children about money will be distributed to EFBC families with preschoolers or elementary-aged children. The articles are adapted from a series in Parent's Magazine and are being distributed with the prayer that they will be a blessing to EFBC's parents as they seek to develop their children as faithful stewards.
- Part I
MODELING SMART MONEY HABITS AT HOME
- Part II
MONEY TALKS FOR PRESCHOOL, CHILDREN, & TEENS
- Part III
SEIZING EVERYDAY OPPORTUNITIES FOR “MONEY TALKS”
- Part IV
USING ALLOWANCES TO TEACH CHILDREN ABOUT MONEY
MODEL SMART MONEY HABITS AT HOME
It has been said that “Children are great imitators”. So, give them something great to imitate.
As parents, we know our children observe our every action, including gaffes that we hope will go unnoticed. We have those hopes because we know that our actions speak loudly.
Surveys routinely reveal that parents have the biggest influence on the way kids save and spend money, more than friends, celebrities or their teachers. Believe it or not, parents shape the way children manage money more than anyone or anything. They actively absorb the way that moms and dads pinch pennies or make mistakes with money.
QUESTIONS TO CONSIDER
Modeling “money smarts” takes a serious parental commitment. Parents should consider the behaviors that they’re modeling to their kids by asking themselves:
- Do my kids see me economize?
- Do they see me shop more often at outlet malls or high-class boutiques?
- Do I suggest that shopping is entertainment?
- Do I wait for an item to go on sale?
- Do I regularly clip and use coupons?
- Do I send in rebate offers?
- Have my children ever seen me save up for large purchases or do I whip out the plastic when you see something I want?
- When I make large purchases, do I research brands and features?
- Do I comparison shop with my kids to underscore the seriousness of the purchase?
TEACH THEM CAREFULLY
Modeling money smart behavior doesn't have to be complicated; there are many simple things parents can do.
- Involve kids in everyday conversations about money. Use real-life situations to help them learn lessons.
- Use the grocery store as a classroom. Talk through purchases with young shoppers and help them weigh all factors that go into a purchase decision.
- Extend the grocery store lesson to the shopping mall. Reinforce smart spending, not immediate gratification. Wait for discounts, save for items and pay with cash instead of plastic.
- Emphasize planning. Make a list before you enter a store to teach children to focus on needs.
Modeling money smart habits to children – aligning your actions with your words – brings the lesson home. Start early, and you’ll lay the groundwork for financial security later on.