My son’s first money lessons

If you’re giving your child a healthy allowance with no work on his part, at his first job as an adult, he will expect a high salary without putting in effort. PHOTO| FILE

What you need to know:

  • To understand that your own effort is what brings in money is very important. I think we have a society where too many people feel entitled.

  • If you are giving your child a healthy allowance with no work on their part, that sense of entitlement will not disappear at their first job.

  • They will want to be paid a higher salary without any corresponding change in their effort or attitude.

  • We hope that when our son wants something he will learn to think about what he needs to do rather than who has to give it to him.

Children need to learn about money. I look back at my past financial behaviour and wish that some lessons had hit me harder when I was in college, high school or even primary school. I am a parent as well and I realise that if I don’t teach my children what I now know, they will also wish someone had taught them earlier.

If you are not consciously teaching them something, they are learning from society, which may not always be the right thing.

You can change that by teaching them simple finance lessons. No matter what age they are, give them some experiences that will have an impact on them.

I want to share what my husband and I started doing very recently with our almost four-year-old son, and what we hope to achieve.

We started giving our son a weekly allowance – not for free, but for doing certain things outside the normal scope of his chores.

He therefore earns his allowance by doing tasks such as making his bed, making sure his dirty clothes are in the laundry and so forth.

You will obviously have to take into consideration your child’s age in order to assign age-appropriate tasks. For example it is fine to give him a reward for making his bed at age four, but by age seven, he should not get any brownie points for this and his allowance should come from other tasks. You may have a child who can come up with the weekly shopping list, arrange your home-office files or even wash your car.

You should make the call on what is expected and what constitutes going the extra mile. The allowance is for the extra mile.

What do we think this will teach him? That money can and should be earned. We also hope it will establish the relationship between effort and money.

To understand that your own effort is what brings in money is very important. I think we have a society where too many people feel entitled.

If you are giving your child a healthy allowance with no work on their part, that sense of entitlement will not disappear at their first job.

They will want to be paid a higher salary without any corresponding change in their effort or attitude.

We hope that when our son wants something he will learn to think about what he needs to do rather than who has to give it to him.

The day our son was waiting for finally came. He could go to the piggy bank, remove his money and buy something.

My husband pointed out to him that he could only remove half the money in the piggy bank. This is to instill the value of saving and discourage him from spending all the money he has.

We hope he will learn that the sole purpose of earning money is not to spend it immediately. Delayed gratification is a discipline that will serve your children.

Delayed gratification

 Maybe then when they get a salary they will not live payday-to-payday. Saving, in their mind, will be automatic.

The last and best lesson came when we were actually in the shop. I was praying my son does not see something he likes and can immediately afford.

My prayers were answered. He went from toy to toy only to be told he did not have enough money. Though his numerical understanding at this age is still minimal, his understanding of toys is not.

He realised he could not afford the big, flashy toys that he wanted. His disappointment was obvious when he understood the limitation of his finances.

However he did eventually find something he liked, albeit less flashy, and he bought it. He took it up to the cashier himself, asked how much it was and handed over his money.

He was extremely proud to have bought something for himself with his own money. He also understood what he would have to do to afford the toys he wanted. He has to do extra tasks for more weeks.

So he has learnt that he will not be able to afford everything all the time and will have to compromise. He also learnt that his discipline paid off.

As we go along I will introduce goal setting, such as identifying something in particular and working towards that.

We also want to introduce giving to church, to his brother in the form of gifts, and so on. The piggy bank will also at some point evolve to a bank account, shares and others.

One amazing side effect of this experience is the conversation; children understand a lot more than we give them credit for. My son now asks a lot of questions about money, how his parents make money, what we buy and so forth.

Many of us would have benefitted from such open, honest discussions about money when we were growing up. So be thankful to have the chance to change that with the next generation.