Kids and money

Dear friends,

When I had been to shopping the other day with my kids, I was so shocked by the behaviour of one parent of a kid who was aged say about 9 or 10.

The shop is not so big, it is a supermarket type where you get everything you need. I was shopping for some stationery for my son as he has the habit of scribbling on the walls which we are unable to control. To stop him from that I decided to get him a chart and some fancy crayons (my daughter has all regular ones). There were some crayons in the form of animal figures. Infact it was my daughter who saw them first and I was in a dilema as to whether she will also ask for one set for her. But I was so happy when she said amma dont waste money. Afterall he is not going to use it all the time and I will use it when he is not using it for I might also want to see how the image comes.

So we got that and the scene of that boy is happening near the billing counter. The mother had come to purchase a gift article (she happens to be my neighbour). She had got one and when she came near the counter she was so shocked to see her son with one full cart of items toys, stationies, choclates and many more which I dont remember correctly. He wanted all those inspite of his mother telling him that he already has one of each at home unopened. But he kept on insisting and they were creating a big scene. Atlast mother had to give up but she got only the choclates and all the way the son was dragged and he was creating a tantrum.

I was worried what my daughter will do as they are play pals. After coming out of that shop my daughter asked me slowly, Amma is that anna not saving to get these things he need? I told her that I dont know. Can you all understand what she means?

During her third birthday one of her friends gifted her a small piggy bank. She was unable to understand what it is, then when we explained she said that she wants to see that it is full. So every other day she will get One rupee coin from her father or from me for the small chores that she does for us. Generally it will be bringing water, finishing her homework without help some thing or the other. And she saved so much that she got a T.Shirt for her father or father's day this year. For the past two years right from my son's first Birthday she gets him a gift for his birthday and newyear; Small soft toys or some other toy. She got me a beautiful shawl, a photo frame for her grand parents. The list goes on. She still has some good amount saved and whenever the stock of pencil or rubber runs out she asks her father to use the money from the piggy bank to get it.

I am not boasting. But is it not good to teach our kids the value of money and the value of saving?

You are true............ Just read my thread enforcing money power on kids... You will laugh.................

Hi Rajmi,

Yes its so true, and my dear be proud of your daughter( not very many kids around like her these days). And I hope that your little one follows her too.
My kids too know the value of money ( ie not wasting it on too many toys or chocolates etc Yes I have been called the evil mother by a few relatives for not pampering their whims ) . Yes even the little one( who will be 4 in a couple of months). We do have the occasional scene in the stores ( who can resist all those chocolates and toys attractively arranged on the shelves within reach of the little hands !!) , but thankfully everytime, he has seen the sense in not buying .
It is good to inculcate these good habits right from childhood.

Mals Am going right now to read your piece.

Vandhana

Hi Vandana,
Thanks, I am always proud to have her as my daughter for she has never let me down and she is a wonder kid. Any one will just love her at the first instance.

Infact for this birthday which went on the 8th of August, though she got two new dresses (as my husband says utilised the full budget he had for her Rs. 500), a digital wrist watch from me... she insisted that she didnot want a birthday party. When asked for the reason she said I am old enough not to have one also I see so many people who dont have their daily food at all. When so I dont want to have a party and all those kids who we invite have the tendency to waste, instead let us go to that orphanage (one of my friend took us once) and celebrate there with all those kids. And she distributed pencil and a eraser for all those kids around 90 with her savings.

Once again I am proud to say that I have a wonderful daughter.

hi rajmi,

Nice and sensible daughter.. kudos to both mother and daughter. I am equally proud of my daughter and of course son. You must me wondering the ofcourse part.. my daughter when it comes to money, she is more matured in her outlook and also in spending while my son likes to spend, but will analyze when reminded.

Both of them have savings account. both save the same amount. We give them 100rs., each every month. Instead of giving them money for what they do.. we tell them that we will debit their account for all the -ves. it is more like the golden stars and black stars they get at school. So they are saving

When I send my daughter to get milk,vegetables or whatever.. she will see for the best at the lowest price possible.. For example..if FIL goes to bring milk he will be bringing full cream which is at 10rs. if she goes she will bring the toned one at 8.00 and justify that it is better for health. and also 2 rsx4 will give one packet for tomorrow. In a supermarket..she will think twice about the rate..too many calculations...i used to wonder.. have i made the kids conscious by my behaviour..but seeing your post.. i feel i should be proud about both of them.

Hi Shanvy,
Thanks. Kids of today are too smart, that at times they outsmart even us the elders. We need to be extra careful with them. I realize that so many times very late.

Hats off to your daughter. My kind suggestion is make her an administrator. Infact you could even give your household budget to her she will save even more than you I beleive

Originally Posted by rajmiarun

Hi Shanvy,
Thanks. Kids of today are too smart, that at times they outsmart even us the elders. We need to be extra careful with them. I realize that so many times very late.

Hats off to your daughter. My kind suggestion is make her an administrator. Infact you could even give your household budget to her she will save even more than you I beleive

Hi rajmiarun,

To quote my son (9), when we were in reliance yesterday.. "charu(12) and you are two of the same type. tough to deal you..i wish dad was here.. What i want to convey is that myself and daughter are the same.. so no two administrators for the same home.it will become miserable. yes..we dont want her to be too involved in these matters. we just allow her free hand when she goes shopping for me.
After all she should not lose the child in her....

Fascinating Topic - thanks rajmiarun

I found this on Yahoo Finance by Suze Orman, a personal finance expert who I admire for her concise style.

Though it is aimed at consumer driver American society, this applies well to Indian metros where parents today have substantial disposable incomes, lavish lifestyles and privileged kids.
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The back-to-school season seems like the perfect opportunity for every parent to get a grip on what lessons they're teaching their kids about money.

I know plenty of parents who wouldn't earn more than a C- for their efforts. Sure, they mean well, but that doesn't mean they're doing a good job in raising money-smart kids.

School Failure Is Your Opportunity

What's really sad is that this isn't a topic that you can rely on the schools to teach: It's rare for any personal finance or money-management courses to be taught in schools. That makes it all the more important for Mom and Dad to make sure they teach their children well.

The big problem is that parents seem to be blind to the negative and sometimes confusing money messages they send their children. I'm not talking about mangling factual lessons about how interest works or what debt is. That's the easy stuff.
What's hard to understand is how the power you give money in your life and your family's life has a huge impact on how your kids learn to relate to finances. You're kidding yourself if you think that learning about money is just a matter of a few basic math principles; your children pick up far more subtle and powerful messages by watching and listening to you.

With that in mind, here are four dangerous money messages parents unconsciously send to their kids:

1. Be happy to go to work.

After a great weekend spent at home, Monday rolls around and you need to head back to work. Transitions for little ones are hard, and the prospect of losing you to work for the day can create sadness that sometimes builds into a mini-meltdown.
So what happens next is really interesting. You tell your kids some version of the following: "Oh, honey, I hate that I need to leave you, but I have to go to work so I can make money." True as that may be, from the child's perspective they now know what to hate: work and money.
Sure, you can think that as they age they'll grow to appreciate the need (and desire) to work. But I think it's still very important to be ultra-conscious of how you introduce work and money to your kids, and the role you give it in your family dynamic.
2. Don't bank on your kids' money.

The worst way to teach kids about money is to force them to put all of theirs from gifts, allowance, etc., into a bank savings account that you then tell them they're not allowed to touch. This is a classic case of good intentions gone bad: You've now made the bank a bad guy in their minds -- it's where money goes so they can't ever use it.

No 5-year-old can project out to the age of 18, so it makes no sense to tell them that their money is for when they're older. I do think it's imperative that a lot of their money in fact be saved, but you also need to let them spend some of it, too. They have to have a relationship with their money to learn how to be responsible with it.
Be careful with piggybank separation, too. You remove their immediate connection to money when you suggest that they stash what's in their piggybank in a real bank. I think it's healthy to encourage them to have some in their piggybank as well -- it's an important connection for them to have with money.
It's also practical: When they announce that they want some toy or gizmo, they have some cash handy to contribute to the purchase. Outside of birthdays and special occasions, having your child use some of their own money -- however small -- for a purchase is vitally important. It pushes them to embark on a decision-making process: "Do I really want this enough to part with some of the money in my piggybank?" That's much better parenting than bankrolling their every whim.
3. Allowances aren't a birthright.

I hate allowances, or at least the way allowances seem to work in 99 percent of families. As far as I'm concerned, the "you get an allowance just for being you" type should be banished.
Whenever I ask children why they get an allowance, I typically get that kid-specific shoulder shrug before they tell me, "I dunno, just because" or "Because my older brother gets one." Or I get an incredulous look that says, "Lady, are you nuts? It's my birthright to get an allowance."
Not only is such an allowance the wrong message to send your kids, it's a lost opportunity to teach them the true value of money -- and the value of earning money. So, rather than an allowance, try "kidspensation," where your kids earn money in exchange for something they did that you both agreed had value for them and the family.
The key is that it has to be something they did. Kidspensation shouldn't be used as payment for good behavior; that's not something you reward with money, it's simply what you expect from them. And don't set up kidspensation as a set amount; it should vary each week based on what your children achieved.
Have an ongoing conversation throughout the week about chores and jobs they can take on, and negotiate the terms as you go. Or you can set up a time to sit down with them at the end of each week so they can make their case for what they deserve based on their output.
This exercise teaches them many important things -- how to talk about money, for one. It also starts to teach them negotiating skills, and it introduces the concept of work for pay. Please don't make this a somber, "tough" experience, though -- again, money shouldn't be the bad guy here. This can be fun for everyone.

4. No piggybank raiding allowed.

Every kid's piggybank is where their lessons with money begin. They love their piggybank and they love the money that's in it.

So what do you do? The pizza guy comes to the door and you don't have enough money, so without asking you go right to your son's piggybank to get the money you need and tell him you'll pay him back. Then what typically happens is you forget to pay it back for a week or two, or possibly forever.

You may have forgotten, but I can assure you your son hasn't -- it broke his heart. So keep your hands out of your kids' piggybanks. You need to plan ahead and never catch yourself running short on funds, because if you don't, what sort of lesson is that?

vmur,

That was a wonderful article with lot of pointer. thanks for posting.

"You may have forgotten, but I can assure you your son hasn't -- it broke his heart. So keep your hands out of your kids' piggybanks. You need to plan ahead and never catch yourself running short on funds, because if you don't, what sort of lesson is that?"

My son never forgets to point out. so have vouched to myself i will never touch their piggy bank.

Originally Posted by shanvy

vmur,

That was a wonderful article with lot of pointer. thanks for posting.

"You may have forgotten, but I can assure you your son hasn't -- it broke his heart. So keep your hands out of your kids' piggybanks. You need to plan ahead and never catch yourself running short on funds, because if you don't, what sort of lesson is that?"

My son never forgets to point out. so have vouched to myself i will never touch their piggy bank.

Yeah the same with my daughter too. Though she herself gives me the money whenever I need the change she will make sure that I put it back. I do so afterall it is her hardearned money