Children and money

By | 19.08.2017

The last two years I tried not to touch this delicate topic, but I think it’s time. A very long time came to the conclusion that if you do not teach children to deal with finances, then this ignorance will greatly hurt in adulthood. Even when it comes to such things as the beginning of close communication with the potential second half, ignorance of the rules of financial management will cost the relationship – or if the relationship will be formalized – it’s even more expensive.
Rule # 1. Learning to handle money without money is impossible. This is a very extensive point, which is not obvious to many adults – what can we say about children? Let’s consider it in detail.
Many families adopt an approach that I absolutely do not support: the child does not have his own money, but at his request he is bought toys and things and entertainment is sponsored. This creates the following problems: a) the child does not know (and is not interested in) the cost of the things requested; B) the child does not know when to stop asking, and parents do not always know when to stop with the satisfaction of these requests.
The correct approach is the allocation to the child of a week (well, I used to think for weeks) amounts for purchases, toys, etc. This amount: a) small (for example, we give the child about $ 5-7 per week); B) is given entirely only if the child fulfills previously agreed, but achievable, requirements (for example, from the list hanging on the wall) – otherwise the sum is cut. This approach solves a number of problems:
The child begins to understand the value of things relative to his pocket money (see the title of the rule: $ 50 per game is an abstract value; to buy a game, you need to save money for 10 weeks, – quite a clear value);
Parents do not have a headache about the budget for small purchases for the child, because A child can carry out these purchases independently;
The child learns to spend his money, prioritizing purchases: sometimes you have to choose between a balloon and ice cream.
The correct approach is not to give the child large sums (not more than the amount of pocket money given to him for a month). There are often situations when a good relative of a child is given $ 100-200, when pocket money is issued hardly $ 10 per week. Needless to say, such gifts ruin any financial self-discipline in the child? What’s the point of saving money when a kind aunt will give you more money at a time than you can save for 3 months? The correct approach is to give the child the cost of an ordinary toy, which he used to receive from guests (say $ 20, in cash, and the rest of the money to his parents). Parents on these means (or with the addition of their own funds) will then be able to buy the child the right things.
Rule # 2. The TV can replace the parent, but the child needs to be reprogrammed. The TV is really capable of distracting the child for many hours – but at the cost of tens of thousands of commercials that children watch every year. (It is clear that children’s television is also commercial: they are not talking about it now.) I already wrote about the fact that children are increasingly influencing purchasing decisions – because of social pressure, and also because of advertising. An additional disadvantage from viewing advertising is that the child ceases to appreciate those things that he has or for which he has enough money, and begins to fantasize about the abundance of others (usually more expensive, as they are actively advertised) things . The presence of a large number of temptations is detrimental to financial self-discipline.
Rule # 3. If there is no money in the family, the child should know about it. I have repeatedly seen families who live by the principle of “the child should not suffer”, spending the last money on the entertainment of children (I have nothing against spending the last money for teaching children). If the family is forced to save so as not to get out of the budget, children should take an informed (!) Participation in this process. Perhaps this will result in fewer visits to entertainment venues; Perhaps, instead of going to the movies you’ll have to watch a movie downloaded from the Internet. Children can be shown a list of daily or weekly spending to put things in context. For example: “We had to spend no more than 2,000 rubles this week, but today is Friday, and we have already spent 1,500. Let’s eat ice cream at home instead of going to a cafe.” It is noticed that adults are much more willing to share financial problems with other adults, Rather than with their own children, fearing that their children simply will not understand. They will understand, unless you complain about the lack of money, stubbornly spending money on bullshit.

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