The individual’s relationship with money is built from childhood, with the notions and habits transmitted by their parents. According to financial educators, one thing should be taught on priority as it ensures the future success and financial security of the child concerned. But what is it?
Everyone’s financial problems usually have their roots in the distant past. Thus, it is often during childhood that our relation to money ; whether healthy or unhealthy. Depending on our living conditions, the financial behaviors that we have observed in our authority figures, but also the financial education that they have consciously given us; our relationship with money can either benefit us or disadvantage us.
However, in most homes, parents do not even dare to initiate financial education for their child. They first think that he is too young to understand income and expenses, basic notions of finance… For other parents, the idea of teaching about money does not (even) cross their minds; a waste when we know that this minimal investment generates multiple benefits for the toddler’s future. It would even take just one lesson taught to guarantee its financial security for life ! At least that’s what some financial experts say.* To help children manage their finances intelligently, you simply have to teach them… “the value of money.”
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Teach them the “value of money”: kézako?
In theory, we roughly understand what this means. But in truth, the concept is so abstract that even adults have difficulty describing it in a clear and intelligible way. According to financial experts, knowing the value of money is actually understanding two very specific things about him:
- 1) Money is not eternal: it is earned, maintained and does not fall from Heaven.
“Understanding the value of money means understanding everything you need to do to earn it, manage it, and make it grow”explains Bola Sokunbi, founder of Clever Girl Finance. Thus, the child must know precisely where money comes from, understand that it is the result of actions that we undertake (work, financial investments), and therefore that our standard of living is maintained. and is maintained thanks to the management we do of it. It should not be taken for granted.
- 2) Money is a means, not an end.
Indeed, money is a means to an end. Accumulate a lot of money Or to be rich does not necessarily allow one to live comfortably or achieve fulfillment. Rather, it is the fact of having enough money to do what you want that makes you happy: from a simple small pleasure purchase, to financing a surprise trip, to pursuing your dreams and desires.
Hence the importance of monitoring expenses and cash receipts,balance your budget so as not to be in deficit because, it doesn’t matter if you earn two million euros, if you are extremely spendthrift, if you do not define a budget in advance and/or if you do not respect it no, we will have more money at the end of the month to finance all these projects that make us dream. Money has a notable impact on our life: it can change it for the better and allow us to be fulfilled.
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How to teach the “value of money” in practice? Some exercises
Teaching your child the value of money is a daily practice. In this sense, financial education specialists give us concrete exercises to fully embody what we are trying to teach.
- Give the child pocket money so that he learns to manage it independently.
The point of this practice is to teach the child, from a very young age, to manage their money alone. We don’t tell him what to do with it, how to spend it, how to distribute his small purchases over the month so as not to run out before the next school year… He must therefore think, plan your budget and respect his little “financial plan” without anyone’s help: he makes his own progress or his own little financial mistakes with the money we give him.
“For example, if they spend all the pocket money they have buying candy the first day they receive it, they have nothing left to save for the things they want (e.g. a new game)”explains Bola Sokunbi.
For parents with modest incomes, don’t worry: it is not necessary to give a lot of money: a few coins are more than enough, because it is not the amount that matters, but the way in which he spends it and how he manages it overall. In doing so, he acquires habits that will serve him well when he is older and has to manage larger sums of money.
- Support and guide them in managing a budget, through family “food shopping sessions”.
Besides pocket money, an exercise where the child is totally independent in maintaining the budget, we can also offer an exercise where he learns to control his finances while being guided. To do this, several specialists recommend involving him in the tracking expenses allocated to food shopping. For example, we can ask “trying to determine how many items on the shopping list you can buy with the budget you have available.”*
To make the exercise more difficult, we can also offer to save money by “finding good deals, like sales and alternative or cheaper products, so that we can complete our shopping list and still have a little money to use to buy a treat or treat.”* Obviously, it is better to turn this into a game so that the child does not see this habit as a chore, and does not associate it with a negative feeling. Money should not be seen as a burden, but as a fantastic tool to meet your needs and aspirations.
Far from claiming to want to train the traders of tomorrow, teaching this financial lesson to our toddlers can thus help them save yourself from future budgetary and/or banking problems. Forget debts!
Freelance journalist
Open-minded and in love with life, Emilie likes to decipher the new phenomena that shape society and relationships today. Her passion for human beings motivates her to write…