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.
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.
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