Where do I start?
Our Journey
As a first-time father and an accountant, I am beginning the journey of educating myself about teaching my son about money. I will, from time to time, be releasing an article on KATA Accounting’s website about this journey and I hope this provides value to other new parents.
What is Money
Money is a tool that allows for the exchange of goods and services. You provide a service that has a certain value to your employer or client, and in exchange you receive money. You can then exchange some of that money for goods and services you need or want.
My son isn’t yet 6 months old, so I can’t teach him this for quite a while. So what can I teach him?
Mindset Matters
If you’re a regular reader of our blog articles, you may notice that I have mentioned this several times before. The mindset we have about money is closely tied to our experiences with money during our childhood.
As parents, Julia and I need to demonstrate the mindset we want to instill in our son in front of him. He will learn first from observation of the examples we set.
Negative Emotions
This is the area we can avoid the most when discussing money matters in front of our son. Growing up, we may have had various mindsets imposed upon us. Some of these might be familiar…
“Money is the root of all evil.”
“We can’t afford it.”
“Money doesn’t grow on trees.”
“I’ll buy you whatever you want!”
Children hear these phrases and they begin to form their conception about money. This may be things such as the scarcity mindset or that money is evil. Are these the ideas you want your children to develop?
If they have a scarcity mindset, how will this affect their lives? If they don’t think of themselves as evil, how will they fulfill their needs and wants?
Positive Moves
I’ve been trying to learn about what CAN be taught to children at very young ages, and it turns out that most of their learning in their formative years is through observation and example. As such, we need to provide that positive influence about money.
Openness
Being willing to talk about money in front of our son is one thing that we are going to do regularly. Some of the biggest emotions surrounding money are negative – fear, shame, and guilt, for instance. We want him to learn from our discussions that having regular, open conversations about money is what should be.
By not talking about money, couples can often let negative emotions simmer until they explode in an argument. This sets another example for children – that money is a source of conflict and disharmony in the home.
Goal Setting, Value and Deferred Gratification
We are goal-setters. We want our son to be a goal-setter. A big challenge with goal setting is the marketing pressure from everywhere to “buy, buy, buy!” There is also a lot of societal pressure from our peers and other media that feed a “fear of missing out,” “I deserve it,” or “keeping up with the Joneses” mentality.
These pressures can have massive negative effects on the mental health of young people – as we can see happening in the housing market today. We don’t want this for our son.
We will openly discuss our goals and the “why” behind them in our son’s presence. We will talk about the financial needs to achieve these goals and demonstrate how not spending today will allow us to achieve bigger goals that will benefit our family.
We will talk about value. How what we do provides value for others and how others have value. We will talk about how a deal isn’t a deal if you don’t need it. (As Julia says, “There will always be another sale.”)
We’ll talk about how waiting can result in better value for money, or how buying more can provide better value. For instance, we like to purchase the Costco tenderloin and cut our steaks instead of buying the steaks at Costco.
Gratitude
There has been empirical research about how gratitude can positively impact one’s money habits. By showing gratitude regularly, we hope that our son will observe this and be grateful for what he has rather than resentful for what he doesn’t.
As part of our family meeting, (yes, we have regular family meetings), we always give thanks for what we have been provided. For the opportunities we have and the people we love. It’s our hope that we can bring our son into some aspects of our family meeting at a very young age.
Resources
To be completely honest, I’m learning as I go here. I cannot claim to be an expert in this subject matter, but I love learning. One of my favourite sources of learning is from TED Talks. Here are a few of the ones that influenced me so far (I’m sure there will be more).
The Surprising Way to Teach Your Kids to Be Smart with Money
Teaching your kids financial literacy? Make it fun.
Financial Education for Kids: The Ultimate Unfair Advantage (This one is presented by a 10-year-old!)
What’s Next
For me, I’m going to keep learning. We are going to set positive examples and call each other out when we don’t. Eventually, we’ll need to talk directly with our son about money and we’re really looking forward to it!
I will continue to share what I’m learning – and if I think it’s being effective – throughout these articles. But I’d love to learn from your experience? What worked well for your family? What didn’t? What would you do differently next time? What other tools and resources did you use?
I look forward to learning from more experienced parents throughout this process!