Like any parent, the last thing you want is to see your own child suffer from bad money decisions when she or he becomes a young adult. Habits start from young and right. As the primary caregiver, it is your duty to make sure that your child has acquired the right habits in money matters before she or he is influenced by otherwise such as the consumerism culture. Thus, here are 5 steps you can begin with towards creating a financial literacy parenting style for your jewel in the family.
Step 1: Make Up Your Mind
If you do not have the mindset to start a habit within the family, it will drastically reduce the effect of the financial literacy parenting method. A child picks up habits from imitations. Hence, things will not go well if you are practising the opposite from what you are trying to cultivate within your child.
In addition, you will have to be mentally prepared that you will get questions about your old habits and the change. Be ready to be open about your old (and possibly bad) habits and make it a learning journey with your child.
Step 2: Find Teachable Moments
There will always be opportunities for teaching moments especially when you are in a city. Any transaction made before you child can be a lesson. This includes calculation of money as well as planning how to spend and save. Moreover, you can also guide your child to analyse different brands and compare prices. This can range from simple aspects such as the flavour of a carton of milk to complex aspects such as the durability of a product based on the material used.
If you do not wish to bring your child to the stores, you can also guide your child to think about money at home. Examples include looking through the household bills together and planning a goal for the family budget. You can also incorporate simple conservation lessons into your teaching moment and let your child observe the impact of saving water or electricity over a few months of household bills.
Step 3: What NOT to say in front of your child
Approach this with extreme caution! As mentioned, your child imitates your every move and speech easily. Therefore, it may be wise to discuss with your partner and make sure that both of you are on the same page.
A simple start would be to avoid the concept of spending all your money. Saving is one of the easiest habits to cultivate within your child. If you and your partner can hold your thoughts on “cheat days” where you spend on luxuries until you have nothing left, it may be possible to leave a good saving impression on your child.
Step 4: Keep Talking
You may have made a few mistakes at the start. Do not give up! It is essential to continue on building the right habits and you can do this by keeping financial literacy in the family’s conversation.
Discuss it over family dinner or even your family’s Whatsapp group. Ask each of your family members how they have acted out the good habits of financial literacy in their daily lives. You can also include current affairs and tie it into the knowledge of currency value and investment too.
Step 5: Add in Your Trust and Patience
It is not an easy feat to start the financial literacy journey with your child regardless of age. Hence, your trust and patience for the lessons are much needed.
Trust is important when you allow your child the freedom to spend. This includes giving your child her or his allowance, asking your child to pay a bill and even making a big purchase on your behalf. If you trust your child that she or he will make the right decision, your child will be able to learn independently based on the circumstance.
Besides this, patience is required when your child is grasping the seemingly vague concepts of money such as long-term goals. Depending on your child’s age, you may not be able to introduce complex concepts such as debts and investments into the picture immediately. Therefore, it is better if you take one step at a time with your child and make sure that your child has a strong grasp of the basic concepts before you advance.
It takes a whole village to raise a child. Though that is no longer true, it is vital to have teamwork within a household in this financial literacy journey. If you can have the support of your partner, parents, in-laws, domestic helpers and even your older child, it will be much easier to raise a financially savvy child!
Joanne graduated from New York University with a Masters of Science in Media, Culture and Communication. Her area of focus was on media perception of women and she had presented her findings in several conferences. Additionally, she has also founded and presided over the Media, Culture and Communication MA Student Association for her department.
Joanne has a strong focus in Communications and Corporate Education. Previously, she has worked in UBS AG as a L&D specialist as well as volunteered her time with several women organizations in Singapore. Her last position as a Digital Marketing Analyst in New York City, USA has provided her with the skill set that enables her to become part of TNS team.
In her free time, Joanne enjoys learning and travelling, making a point to expand her horizons at least once each year. She also enjoys food tasting and community services.