ming weeks or months. The more your children see how you interact with money and face financial responsibility the better prepared they’ll be to take on those responsibilities themselves in the future.
- Lead by Example As Much As Possible
Children look up to adults and tend to mimic their parents’ behaviors in particular, including personal finance choices and attitudes. Have a penchant for blowing money at the department store? Your kids may develop one, too. Known for being frugal and saving every penny you amass? Your children may pick up those habits too. If you fall into the spending category, children may follow your cues, creating a cycle of debt and bad financial choices that will follow them into and throughout their adulthood.
The best way to combat it is to lead by example. That means prioritizing things like saving for retirement and paying down debt rather than emphasizing saving for a vacation or charging up the credit card for back-to-school clothes. It also means forgoing excessive credit card usage and only purchasing things you can actually afford with the money currently in your account. By simply reigning in the spending and your use of credit cards you’re modeling healthy financial behavior your children can benefit from for the rest of their lives.
- Avoid Instant Gratification
Instant gratification is the enemy of everyone and retailers know that. It’s the reason cheap, throw-away items are always placed at the cash register or in the eyesight of children. Resisting the temptation to purchase these items can serve to teach children that the best things come to those who wait.
Same goes for giving in to children’s every whim. If you buy something every time you enter a store, your children will come to expect that. Instant gratification can be a powerful and negative motivator if left unchecked, and the way things are set up in the United States today doesn’t help with that; Amazon, convenient as it is, makes impulse buys very easy and all-too-common.
A better strategy—one that will make children smarter adults—to say no to impulse buys and instant gratification through consumerism. If your child wants a toy on a whim while food shopping, say no, but don’t give in to your impulses and buy the magazine or that cashmere sweater either. If your kids are begging for an in-app purchase on the spot, say no. Make sure it’s no with a caveat—if they want that toy or those designer jeans, they have to save up for it or use some of their own money to get it. Making them responsible of their own impulsions will teach them to take responsibility for themselves and their finances, and generally helps them become much more prudent shoppers—they probably don’t have all that much money, so they end up learning how to save if they want that expensive piece of technology or clothing.
- Don’t Confuse Wants With Needs
Making our children understand the difference between a want and a need at a young age is paramount. Not only will this practice help them understand the value of necessity, it will teach them that “things” don’t equal happiness. And who better to teach them than parents?
Often times, we start conversations with “I need those new designer shoes” or “I need to see that movie.” That can confuse children and teach them the wrong lessons. Needs are what matter for your survival and, to some extent, your comfort, such as a roof over your head and food on your table. Wants like designer clothes and a flashy car aren’t necessary for your survival, they’re just added bonuses that most of us live without—happily. By understanding the difference it can keep those impulse, want-type buys in check.
- Spending Money, Not Time
Some parents tend to forget that our children not only want us, they need us. They want our time and attention and when we supplement our attention with “things,” our children become hardwired to believe that “things” are love. This will lead to an adult who will spend money chasing “things” to fill a void that’s been there since their childhood. It is far easier to buy our kid the app than to pl