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Children and financial habits

Updated: Nov 23, 2020

My husband is an investment specialist, so needless to say, in our household, part of the dinner conversation is all about what is going on in the financial .

When I read Moneyweb's Tweet this morning, I decided it is always a good idea to talk about our children and healthy financial habits.

Growing up in the 70s, my parents, both Baby Boomers, worked very hard for their money and enjoyed the fruit of their labour. They were good examples to have! But my relationship with money was always different from theirs. I never wanted to be ruled by money. So my ambition was to have enough, not too little and not too much ... just enough!

 My children agree with the fact that they do not get enough personal financial instruction at school and so it is up to us as parents to provide it. 

And that is also why I enjoyed Graig Torr's article so much. His advice, in short, the following: 

1. View money is an enabler, not a goal

Money should not be an end goal. It can result in personal dissatisfaction, frustration and feelings of despair. Rainbow Generation prides itself in teaching children to develop a set of personal goals that they wish to achieve, and this is true for finances as well. As a parent, you should talk to your children about how money can be used to help them achieve those goals and feel fulfilled.

2. Budgeting is a lifelong habit

Rather than a once-off exercise, help your children to make budgeting a normal part of everyday life.

3. Difference between wants and needs

It is vital to regard the consequences of everything you do, and it is no different for the things you want to purchase. For instance, if you buy the iPad now, would you be happy not going on holiday in December? 

4. The concept of having enough

Talk to your children about what it means to have enough, what they consider financial freedom to look like, and what a comfortable life means to them. 

5. Walking the talk

We all know what it means to make your actions speak louder than your words! Demonstrate healthy financial habits. 

6. Financial literacy in a digital world

 We need to teach our children to transact safely and responsibly in a digital world. Over and above basic concepts such as debt, make sure your children can navigate online banking and shopping while making them aware of online scams and fraud.

7. Decision-making

Educated them about the decision-making process such as price comparisons, market research, peer pressure, their own emotions (how they feel about parting with their money), and freedom of choice.

8. Consequences of decision-making

Let them live with the consequences of their decisions without being bailed out by mom and dad. For every action taken there is a corresponding consequence. 

9. Entrepreneurship

 Talk to your children about what it means to work for someone as opposed to working for yourself, what characteristics are required to be a successful entrepreneur, and let them share their business ideas with you, no matter how crazy they may seem to you. Allow them to practice 'imagining' without fear of being ridiculed.

10. Saving for the future

Making sacrifices in the present for satisfaction in the future is not always easy, but saving is habit-forming, especially if encouraged from a young age. 

Solid advice and I wholeheartedly agree! We need to take up the responsibility to educate healthy habits in our children. 

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