HOLIDAYS: MONEY LESSONS START AT HOME

Children begin learning about money long before anyone sits them down to teach them about it. They learn from what they hear, what they see, and, most importantly, from how adults behave around money.

They hear, “We can't afford that,” but may watch us spend freely on things we do not need. They hear us encourage saving, while we ourselves live from one urgent purchase to another. They are told that money does not grow on trees (my favourite line), yet sometimes they see little connection between earning money and spending it.

The truth is, children don't need to understand the family budget to begin understanding that money is limited. They do not need to carry financial burdens that belong to adults. But they should gradually learn that every financial decision involves a choice.

If I spend this, I may not have enough for that.

If I want something, I may have to wait.

If I borrow carelessly, I may create a bigger problem.

These are simple lessons, but they are not easy ones. Many adults still struggle with them.

There is also a danger in becoming too eager to give children everything we did not have. Love is not measured by how quickly every request is granted. Sometimes saying, “Not now,” is a more valuable financial lesson than saying yes.

The holidays provide time for these conversations; and beyond conversations, as our daily financial habits and money needs play out, we can incorporate lessons into them.

You can give your children some tasks at home (wash the car, polish your shoes...) and pay them a token for it. Let them learn how to earn and spend money. Opportunity cost, forgone alternatives, will definitely come to play.

The goal is not to raise children who are obsessed with money. Neither is it to raise children who are afraid of it.

The goal is to help them understand that money is useful, but it requires wisdom.

Challenge: The next time your child asks for something, Ask, “Do you want it, or do you need it?” Then have a conversation about the difference.