Becoming a parent or a grandparent comes with many new responsibilities, one of which is to help raise financially literate children and grandchildren. Here are some good habits to practice when making financial transactions in front of a young child:
Count your change at the cash register.
If there is a mistake, make it known to cashier in polite manner, and obtain satisfaction from cashier or store manager. If you use a credit card, explain that an actual bill will come that must be paid with real money.
Don’t succumb to impulse shopping.
Exercising self-control in financial matters and consumer choices is an excellent model to give our children and grandchildren.
Help determine the difference between “need” and “want”.
Children as young as four can understand that we need food to eat but we don’t need more stuffed animals. Working on this concept early will pay great dividends as the child grows up. Many adults are in over their heads in debt due to “wants”, not “needs”. “Wants” come after paying the required bills and putting money aside for a rainy day. Use these nouns carefully when you talk!
The children are listening.
Be careful of how you talk about money –with a spouse, relative or a friend in the presence of children. Your body language, tone of voice and facial expression send powerful money messages that a child will absorb. It’s not necessary to go over household bills in front of very young children; if arguing occurs, it’s possible that as adults, they will associate paying bills with anger or unpleasant behavior.
Visit the bank together.
Take the child to the bank with you as you make savings deposits. Don’t use an ATM machine with a small child present; if you do, explain that the real money you take out is no longer in your bank account and that there has to be money in the account to withdraw it via the ATM machine. Little children often think an ATM is a vending machine!
Calculate the tip after a meal.
Explain why you leave money on the table at the restaurant, so the child doesn’t think you are losing or forgetting money. Teach the child how to compute the tip on the price of a meal, exclusive of sales tax.
Prepare yourself for money questions.
Have an answer for the inevitable question, “Mommy/Daddy, are we rich?”
CCMI provides personalized fee-only financial planning and investment management services to business owners, professionals, individuals and families in San Diego and throughout the country. CCMI has a team of CERTIFIED FINANCIAL PLANNERTM professionals who act as fiduciaries, which means our clients’ interests always come first.
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