Parents know that modeling can be more effective than teaching in getting results with their children. This goes for almost everything from manners to money management.
Preaching the importance of saving to your children, for example, won’t work unless you don’t present a good role model. The small actions you take on a daily basis form your child’s perception of sound money management, how to make financial decisions and how to set priorities.
That doesn’t mean that you should involve a young child in setting a household budget, but you should present budgeting and financial planning to the young ones in practical concepts and actions that apply to their own daily lives.
Get them to make decisions about some of their own purchases. Let them own these decisions and manage small budgets when you’re shopping for treats, toys, books, etc. When children are offered an opportunity to participate in making money decisions rather than just requesting purchases, they become familiar with why the decisions are made and more likely to accept them.
Here are few concepts to focus on.
Affordability
Telling a child that you won’t get a certain item for yourself, the family or the child because you don’t want or you can’t is unproductive. Talk instead about the concept of affordability. There is a difference between wanting something and affording to get it. Affordability puts the item within the context of the household’s means as well as the time frame. For example, something may not be affordable now, but you can save up to get it later. Or another thing can be simply unaffordable.
By differentiating the items that are desirable but unaffordable from unwanted items, your child should learn that a parent’s “no” has more than one reason. Similarly, this child should be able to grow a skill to control impulse shopping thanks to the training on taking affordability into consideration.
Value for money
Explain why simple money decisions are made. You may choose to spend Dh100 on groceries but not on toys – basic needs versus luxury. Similarly, you may decide to buy a toy for Dh50 but not another at a similar or lower price because of the quality of the toy, its educational value, durability, etc.
Again explaining the basic factors – like quality, use and durability -- that contribute to the making of a money decision can be more helpful to a young mind than a simple “yes” or “no.” Keep in mind, however, that you should avoid discussing the value of the item itself from an adult perspective. In other words, your perspective is certainly different than your child, so recognize your child’s need and focus on more objective aspects such as how the item is made, whether it will work properly or not, etc.
Priorities
Even preschoolers may be able to set priorities. If you’re clear that you would be able, for example, to buy only one item at a certain amount of money, you probably will make it their job to find this item. That strategy helps you avoid the discussion later when a long list of items if requested. In addition, your child should be able to think about the different options available and make sacrifices and compromises.
You may need to hold their hands through the process for a while, however. Ask questions like what they like about each item, what they would rather have immediately and what they can wait, etc. By doing so, you get them familiar with how to make decisions now and later. In addition, you avoid the total meltdown that most parents face when they are the sole decision maker. When children own their decisions, they learn that there are consequences. For example, getting the wrong item means an opportunity for a better item is gone.
Rania Oteify, a former Gulf News Business Features Editor, is a Seattle-based editor.
