Be your children’s money role model

It has been a long time since anyone believed you can tell a child to “Do as I say, don’t do as I do.” Modern experts agree that the best way to teach a child anything is by example. In spite of this, many parents fail to ”show” their children one of the most important lessons they’ll ever learn: how to deal with money responsibly.

“As a parent, you are the most important role model for your children,” says Azhar Laher, author of ‘Confessions of a Dad: My Kids Don’t Understand the Value of Money’. “They notice how you treat people around you and they observe how you manage your work and family life. They are also aware of your good and bad habits when it comes to managing money.”

Because this attentive and impressionable audience is watching your every money move, Azhar recommends that you find opportunities to demonstrate financial lessons in your everyday life. Here’s how...

Be organised Keep track of what you owe and pay your bills on time. Children notice how organised you are and how flustered or calm you are when making payments.

Make a point of letting your children know when it’s time to pay the bills, even if you do this online and make statements about meeting the month-end deadline on time or explain how your creditors will be happy to be able to use the funds.

Don’t spend impulsivelyPlan for big purchases and save for them over time. If you sneak unplanned purchases into the house, your child will understand that you buy what you want, when you want it. 

If there’s something expensive that you want, put a chart on the fridge with a savings goal underneath it and cross off milestones as you get closer to your target. Encourage your children to do the same with their spending goals and make it a family affair. 

Live within your meansRemember that the number-one rule of money is “Don’t spend more than you earn.” Children are intuitive and will work it out when you have splurged even if they don’t understand the rands and cents.

Communicate with them, without ever making them afraid, about how far the monthly budget can stretch. Discuss options like, “If we go out for dinner tonight, we can’t go to the zoo this weekend,” so that they learn how to compromise and prioritise different expenses.

Teach modesty about wealth and possessions In a society where wealth is seen as a testament to success, it is easy to fall into the trap of using money and possessions to create a positive image of yourself. Try to instil a sense of self-worth in your children that extends beyond the trappings of wealth, so that they can live healthy, happy, authentic lives.

Don’t openly admire expensive brands and possessions – especially if they have no inherent value beyond their label. So it’s fine to say that a dress is beautiful, but avoid saying, “I love Prada!”

When talking about people you admire, make sure that you communicate the human factors that make that person adminable.

Don’t be afraid to say noIt can be hard or even scary to say no to your children. While it may cause you pain or lead to tears, a simple, resolute “no” could be the best learning experience your child ever has, because they will learn that not everything will just be given to them.

Of course, you should treat your kids from time to time, but don’t give them something every time they ask for it. It can help to explain in advance of an outing or shopping trip that there will be no treats, so that they don’t build up an expectation in the moment.

Don’t foster an entitlement mentalityPeople have forgotten the value of working hard for what they get. More than ever before, parents should teach their children to become independent through hard work. Ask your children to participate in chores and odd jobs around the house, and don’t keep dishing out pocket money or gifts in the face of spoilt behaviour.

It can also help if you give older children volunteering opportunities in children’s homes or soup kitchens so that they come to understand that other people don’t have many of the things that they take for granted.

Teach that saving is fundamentalDon’t assume that your children will naturally be savers or understand why it is important. They have a hard time understanding the future, so you have to explain how sacrifices now will benefit them later. They may not like money rules like putting aside a portion of their pocket money or having to save for the things that they want when they are young, but when they are older, they will appreciate that you helped them to get in the habit of saving. Remember that it’s easier to develop good habits than break bad ones, and if you help them to save when they are young, it will seem normal and natural for them to continue when they are adults.

Help them to work towards the things they want by saving money. Offer them opportunities to earn more money by helping out with extra chores around the house. And even agree to match their target rand for rand if they meet their goal, so that they have an incentive to save rather than spend.

The bottom line If you have any bad money habits or financial troubles, you don’t want your children to repeat the cycle. For this reason, it’s vitally important to make sure that you’re in control of your money, to help them to get in control of theirs.

And the most important lesson out of all of this is to make sure that while they understand money and appreciate nice things, they see other things in life like happiness, health and personal growth as far more important.

To find out more about Azhar’s book, view the trailer on YouTube.