Many Pakistani parents dread talking to their kids about money. Money is still considered a taboo when it comes to talking to our kids. For some reason the ‘money talk’ causes a sense of awkwardness, discomfort and unease amongst many parents and families today. It really shouldn’t be that way, talking about finances can help your young ones in becoming financially responsible adults who understand the foundational perspective revolving around the responsibilities, obligations, and challenges that come with ‘money matters’.
Though it doesn’t make sense to talk about money to kids who are really young, experts believe that conversation around money matters should start as early as 5 years and upwards. Peer pressure starts around the time your kid enters into Kindergarten. Your child must know that they can’t get everything that they want and they must choose to get what is more important to them at that point. You can cultivate this by getting the child to choose just one item the next time they want two when you are at the toy or grocery shop.
It’s a good idea to start your child on an allowance by the time they are between the ages of 6-10. Some experts argue that allowances shouldn’t be tied to chores or tasks, since it is an exercise to get them to manage money as opposed to rewarding them for duties they should be doing anyways. Giving them an allowance and encouraging them to figure out how they will save up towards a purchase that they want is a good way to inculcate money management. This helps them cultivate goals and the value of being frugal.
Most affluent parents think that their kids are oblivious to their wealth status. When it comes to money, kids of all ages know more than we think that they know. The only thing is that they are a little unsure about what they think they know. If you are someone who has amassed a fair bit of wealth in your life your kids will know. How? kids are very cognizant of their environment; they will be aware of the type of house you live in, the vehicles that you own, and the vacations that you take. The thing is that kids aren’t oblivious to their surroundings, the chances are that they have put the pieces together. And if for some reason they haven’t, they would have heard it from their friends, who have either figured it out for themselves, or heard about your wealth from their parents.
If you want your kids to evolve in to financially responsible adults you will need to lead by example. Your attitude towards money, debt, bills will all lay the foundations of how your kids deal with these matters when they are adults. Many parents have a strong sense of the values that they’d like their kids to develop with relation to money, but when it comes to themselves they don’t act on these values. You need to walk the talk you are giving your children. For example it is one thing to say ‘we want our children to understand that material possessions are not the source of happiness and fulfillment’, and another to really demonstrate through your own actions – after all the medium is the message. If your own life is driven by conspicuous consumption (i.e. buying stuff to display your wealth), your kids will quickly catch on to see that the values you push them to develop aren’t aligned with your own practices. This in most instances will lead them to ignore what you say and follow what you do. Before you start pushing values about money, you should really do a check on yourself to see what it is that you are displaying through your actions. If the values you preach aren’t in line with your actions then as a first step you need to align yourself to the practices that you are trying to inculcate in your kids. In examining the extent of which of your own values are aligned, you will need to focus not just on conceptual matters but also on the practicalities of your every day habits related to money.
This means both parents need to balance their views and practicalities related to spending on clothes, birthday presents and parties, when it comes to the younger kids. For older kids this may mean expenses related to fancy gadgets, cars, college, vacations and other conspicuous accessories. For adult kids this may mean homes and other general types of financial assistance. You as the parents need to be on the same page so that the message you are conveying about money is not diluted or canceled out by the other parent because of their actions.
It’s important to start inculcating values related to money from the early years. After all they will need to deal with it at some point in their life, therefore it is better you get them started earlier than later.