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Guiding Your Children to Financial Freedom
By Ayo Olesin
Now that the children are on holidays, is perhaps a good time to consider the
introduction of some personal finance principles to younger members of the
family.
The challenge for parents these days is that children are being invariably
raised in an increasingly consumerist world, with a focus more on eating the
cake than on baking it.
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Children are being bombarded with advertising material, especially through the
ubiquitous TV, such that mini battles are fought within the home over which
brand or flavour of noodles should be included on the weekend shopping list.
Virtually every child, with the minutest sense of awareness, wants to dash into
the nearest eatery or wants dad to buy a jeep, oblivious of the cost
implications. This is a testimony to the fact that children are already under
pressure at an early age to live the glamorous lifestyles often touted as ideal.
But it is trite that a ”see all, buy all” attitude is the sure path to financial
ruin and that the spending decision is all about opportunity cost.
Parents, therefore, have a duty to impart practical financial skills and even
more importantly, financial values in their offspring to prepare them for a
fulfilling life in the future.
The first lesson, perhaps, is to show that money does not grow on trees.
Children must be made to realise that money is earned through work and that it
comes in limited supplies.
Personal finance experts suggest that this will sink easy, if the parent sets
the right example. Children watch their parents‘ every move and the way the
parent deals with personal finance issues may exert the most influence in
shaping their own attitudes towards money.
Direct, hands-on experience is perhaps the way to go. Since children like being
part of the bigger family picture, they can easily learn lessons about financial
values.
If they realise that their parents take personal finance seriously, and that
money is a resource to be used wisely, they are likely to follow the example.
The very young children could be encouraged to developed some interest in saving
money and delayed gratification by getting them to put aside part of the
monetary gifts given by relations or family friends and purchasing a toy or
clothes at Christmas or other festivities.
Small children could be involved in the shopping and can help compare prices in
the supermarket, for example. They will learn something useful and realise mum
is prudent with money.
Continued in Page 2
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