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I stumbled onto this: 10 Lessons to Teach Your Kids About Money, which advocates that kids should be taught the value of money, along with a few suggestions to practise the habit of budgeting.
As a reader commented, these seem to be more applicable to older kids; and, at least to me- school going kids with canteens in their schools.
It didn’t stop me from applying it to myself & Caitlin though. I am already teaching her the concept of scarcity, using water as the “commodity”. This started when she was watching Thomas & Friends, where one of the engines (Okay we don’t watch it enough to know the characters yet!) was all grimey but there was no water left to clean it. I extrapolated this & applied it closer to home, citing example-implications of no-water on familiar things to her: Caitlin without clean clothes, Daddee can’t shower, no water to drink, etc. Since then, the first few times she was taking too long washing her hands at the sink, I told her to hurry & not to waste water. She would heed it & volunteer the Thomas example.
These days when I have to do a quick grocery run with Caitlin, she is the one handing over the cash at the checkout & (clumsily with her small hands) receiving the change. While I am pretty certain she doesn’t yet know the concept of big-notes = groceries + smaller denominations, I think she gets that things are not free, that something has to be exchanged for these (or any) goods.
I was chatting about this with a fellow daddy, the same chopsticks entrepreneur friend. While he is younger than I, his little girl is a year older than Caitlin, & is himself the eldest of 3 (along with all the traits of being an older child). Since he is already doing well in his ventures, I would be keen to see how he intends to further “train” this little girl in terms of money & budgeting.
I am aware, however, that there seems to be a blur line- that Caitlin could start getting confused between being wise & being generous & being selfish. We are constantly telling her not to be selfish & to share- her toys, her snacks, her treats. But these are things that are already purchased, whereas one should be taught to be wise at point of purchase- to be wise with money itself… sounds like I am confusing myself!
At the core, she does seem to be a generous character. Hopefully she is not going to be generous with her budget just to herself like her Daddee has been!
PS: I forgot to mention this. During a drinks session with an ex-boss, he mentioned something that made a whole heck of sense. We live in a society so obsessed with academic achievements that we seem to have forgotten the whole reason for this survival tool / skill (after all, good academic achievement supposedly leads to a good job & thus a high pay).
He said he doesn’t teach / urge his kids to get a good education or good grades. Instead, he urges his kids to look for ways to make more money.
Cool. I did that to my daughter too. I let her pay and receive change whenever we buy something. I also explain to her briefly how money is made and what money is for. When you ask her how do we make money, she’ll reply:
“Work or sell things.”
I love Leo. In case you’re interested, I have done an interview with him recently (I hope you don’t mind the link), posted here:
http://www.parentwonder.com/content/view/402/59/
Hi Abel,
Thanks for that article link; I didn’t even come across it when I was over at the Zen Habit site.
It’s a good article too; I think I will forward it to many of my new-parent friends!
Back to the issue of money, I think it may also be some time before Caitlin will understand the concept of pre-paid. I say this because the other times when money is exchanged in her presence is at the highway tolls, where I use the Touch ‘N Go prepaid cards.
Just spotted another good resource on money & upbringing, from your site Abel.
http://www.parentwonder.com/content/view/385/59/
I think this is one of those areas where I really fall down in the parenting stakes. I can’t help it but I tend to give Little Miss money / things for no other reason than I like to see the smile on her face.
It is now to the point that when I get home she often just asks me for a ‘coin’ when I am emptying out keys etc. from my pocket. Of course I give it to her, although I do explain that money is for buying things. At least she ’saves’ the money by putting it in her piggy bank and when it is full we are going shopping with it.
She does understand simple things like having to pay for things at the supermarket before she can open them etc. But my fear is that while she understands the concept of spending money to get things I haven’t made any effort to teach her that you just don’t get given money, you earn it.
We also have a bank account opened for the toddler and money goes into it from each of my pays, so maybe I will try and use that to teach her the value of savings or something - but deep down inside I know she will just spend it on a car or something the minute she is 18.
Oh well, maybe we should just count ourselves lucky that we worry about teaching our kids financial responsibilty rather than having to overcome poverty.
ToddlerDaddy, you make a great point that many of us are very fortunate to be able to teach financial responsibility as opposed to having to overcome poverty.
When our kids were younger, they didn’t grasp the concept that one had to earn money as they thought the bank was just the place that you could visit whenever you needed money.
Through discussion and involving our kids in our family finances, they have really grasped a few basic financial lessons. But I have recognized that each of our two children have very different money personalities, which I have discussed before on my personal finance site.
In my opinion, I believe it is critical to openly discuss finances with your children to help them learn at an early age and hopefully avoid the mistakes that many young adults make.
Caitlin had an empty ang pow packet in her Barbie handbag (no, I don’t condone the whole Barbie scene! It was a gift from Cousin- that’s another whole blog on image!) She must have found the packet somewhere & relived the whole Chinese Lunar New Year experience of giving / receiving these red packets.
Grannee saw that the packet was empty & gave Caitlin RM2 (that’s Malaysian Ringgit) to fill it.
The other day I emptied my pockets into my drawer, inside which Caitlin saw another 2 notes of RM1. She took it innocently to add to her “collection” of notes.
I found out, & told her gently that she is not to take things from people without their knowledge / permission, especially money.
“It’s okay if people give you money, but you cannot take other people’s money without asking them…”. Doubling as a math lesson, I divided the 4 notes into 2’s, “This was from Grannee, & this is Daddee’s. Daddee will take this back, okay?”
She protested, & again I reasoned with her about not taking things, especially money, from people without asking.
In the end, I didn’t let her have my RM2.