That brings some good salience to something that is increasingly not. But there are two things your child must internalise about money, if they are to be any good with it. The first is that it can get you amazing things… if you identify what you want and (usually) plot a clear path towards it.
Goals are and should be the fun stuff. And they should be so sweet that kids can almost taste them.
And it’s not just apps – bank account interfaces for kids often have decent goal-targeting functionality. The more visual and aspirational the better, and progress bars (or the like) work well.
However, inherent in achieving your goals with finite resources, and saving for something, is giving up other things. As adults, we know that. (If you haven’t yet learned it, you may be in a spot of financial bother.)
Pain in the game
That brings me to the second key to creating fabulous money managers. There’s increasing gamification in the available tech tools for children, with which your kids will probably identify well and of which (so long as it doesn’t border on gambling) I’m a fan.
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But there must be ‘pain’ in the game… and in the real world as well. Yes, spending decisions need to hurt. Unless it’s a present, everything from virtual Roblox currency to actual Lego should personally cost them, at least a little bit.
And a related concept to their future economic comfort is that waiting – and foregoing other tempting things along the way – produces ultimate enjoyment.
Getting back to Miss 11, she uttered this telling comment the other day when I took her shopping with cash she’d collected, and she fell in ‘love’ with a shirt: “If I didn’t have to use my money, I’d buy it… but I won’t spend mine.”
She didn’t love it that much. And, once again, it was her cash that gave her cause for pause. That’s payment ‘coupling’, from before, in action. At the time, she was wholly focused on saving hers for something next-level appealing: converting the maximum amount possible to dong to spend on her recent trip to Vietnam.
And she impressively delayed other gratification in the lead-up.
The festive season provides ample opportunities to teach your kids about money.Credit: Aresna Villanueva
There’s a nice little financial literacy trick I use when it’s my cash too. It works wonders to trigger my daughter’s restraint and assiduous allocation of money … if I send her into the grocery store with, say, a $20 note and tell her she can keep the change. She fashions meals cheaper than I ever could!
Here’s a fascinating thing, though: precisely because she finds it less uncomfortable to spend (and there’s also the online gaming impetus), my little girl usually gives me back any cash she earns from me, and asks me to immediately swap it for digital currency on her card.
No matter. I’ll keep putting money physically in her hand… if only for an important (teaching) moment. For as long as we can still access cash, that is.
Nicole Pedersen-McKinnon is the author of How to Get Mortgage-Free Like Me, available at www.nicolessmartmoney.com. Follow Nicole on Facebook, X and Instagram.
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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