Teaching our children how to budget, handle money and save is but a small part of making our children financially astute. Before children can grasp the more technical aspects of finance, there are some underlying principles that are well worth them knowing. Here are ten things we believe all children should understand about money:
- All parents want their children to be happy, and most parents feel guilty when they are unable to buy their children the things they want. Sometimes this guilt is expressed as anger, although it is normally anger at their own financial situation and not at you. Learn to be sensitive to other people’s financial situations, including that of your parents.
- Sometimes parents say no to a request because they simply can’t afford it. Other times saying no is actually an act of love that is designed to teach you both the art of delayed gratification and respect for money earned by others
- Parents want to love their children with their hearts and not their wallets. No material possession will ever outlast the unconditional love that a parent has for their child. Do not confuse money and love. The one is finite, the other is not.
- An iPhone 6 will not make you a cool kid. Nor will FIFA 16. There is no easier route to becoming popular and well-liked than by being a nice human being. Kindness costs nothing and has a higher rate of return than any other investment.
- You will never win the race to keep up with the Jones’s. For as long as you live, there will always be people with more money, bigger houses and fancier cars than you. The frantic competition for newer, bigger, better and faster will keep you imprisoned on a hamster-wheel of fleeting happiness followed by deep-seated disappointment and self-loathing. While you are trapped on this hamster wheel, you deny yourself the opportunity to walk your own path of success. The only competition worth entering is the race to be a better you.
- Be ambitious. Aim for something higher than money. You will be far more admired and respected for your education, knowledge and work ethic than for any material possession bestowed upon you. When you hold your hard-earned degree or diploma in your hand one day, it will mean more to you than any smart phone you were ever given
- As soon as you can, learn how to tell the difference between what you want now and what you want most. Every purchase you make today is a loan against something you might have had in the future. Delayed gratification forms the foundation of your entire financial future
- Until you have traded hard work for a pay cheque, you will never truly understand the value of money. Working hard for your own money and achieving financial independence is one of the most self-empowering and fulfilling things you can do. Kahlil Gibran was right when he said that “work is love made visible”.
- Debt is the easiest pit to fall into and the hardest place to escape. One of the most powerful gifts money can buy is control over your own time. Debt robs you of this freedom, together with a lot of other things. Before buying anything on credit, make absolutely sure you know what you are trading your future freedom for.
- You can most definitely make money doing what you love. If you make money your goal, you will never find happiness. If you make happiness your goal, money will no doubt be a by-product of your efforts. People will be attracted by your enthusiasm, ideas and work ethic, and will invest in your passion. In the words of Wayne Dryer, “Doing what you love is the cornerstone of having abundance in your life.”
Sue Torr, MD at Crue Invest (Pty) Ltd