moneyview | Consumer Education | January 4, 2016

How to Teach Your Kids to Spend Within Your Means?

How to teach your kids to spend within your means?

Supermarkets tell you the funniest stories and also teach you important lessons. The other day, I had just finished my monthly shopping, when I was startled out of my wits by the raucous shrieks of a little girl. Dressed in a gossamer pink frock, she was stomping her feet and harassing her mother to buy her a set of casseroles that were placed strategically on a shiny, decorated table near the cash counter. Of course, the mother’s, “No” or the feeble, “These are not baby’s toys” did not work. The mother, after paying for her purchases, dragged the still screaming child and disappeared outside. The incident left me thinking about the money lessons we shy of, perhaps because we think our children are still too young to glean all that wisdom. But children who are financially prudent from a young age go on to become balanced adults. Here are a few lessons we can teach our children:

Teach Your Child to Wait

Most of us fall in the trap of underestimating our child’s rationality. Hence, when our children pester us to buy them things, which in our eyes are pointless/useless, we either go all stubborn, mouthing the oft repeated, “No” or feebly give in to our child’s demands. Sometimes, we might even end up bragging to our friends, about our children’s stubborn ways. But somewhere along the way, we forget that children are more open to reason, than we credit them with. A firm, “No Sweetheart, we came to shop for our vegetables. We did not come to buy you a toy. Probably if you are a good girl, we can buy one next month.” works a lot better than morphing into adamant grownups.

When you teach your children, the rationality of waiting, not only will they learn to treasure their possessions well, but will also go on to become practical adults who do not take knee jerk purchasing decisions.

Unveil the Mysteries of ATM Cards and Credit Cards

Many children in all their innocence, return your, “We don’t have money,“ with “But there is ATM no?”

In their young minds, ATM is a big machine, inside which a genie hides, holding a big stash of cash and credit card is type of magic wand. Tell your child that you can draw cash out of the ATM only if there is sufficient balance in your bank. Also explain that, when you are paying with your credit card, you are actually taking a loan from the bank, which you need to repay in future. Demystify credit and debt to your child.

Instill the lessons of gratitude

At a time, when demands spiral and there are endless ways of making payments, through EMIs or otherwise, gratitude becomes an alien concept. But children as well as adults need to make gratitude a part of their lives. Being grateful for what you have, makes it easy to practice kindness and charity. Tell your child they should be grateful for the toys with which they play. Show them how there are less fortunate children around, who do not have even a pair of warm clothes to wear during winter. Encourage your child to reach out to the less privileged. Let them experience the true joy of giving.

Finally remember, while money makes the world go round, it is also the reason for the bankruptcy of moral fiber. Teach your child that ethics are as important as rationality, while making any financial decision. After all, the financial wellness of a society depends upon the compassion and generosity quotient of the individuals residing in it. Teach your child that abundance is impossible without giving.

Sridevi Datta is a Cost Accountant. After working as a Business-SME in a leading E-learning centre, she now  blogs regularly at The Write Journey.