Do you remember the first time you learned about credit? I was 15, and I recall riding in a car with my father and sister. My father mentioned credit and credit scores. At that time, it didn’t connect because I hadn’t learned the value of money.
Growing up, finances were kept between adults. I never had a piggy bank, nor had I any experience with it. Granted, I wasn’t raised in the U.S., and there was no such thing as credit in Africa. We farmed and kept our money in a secure place at home. The banks were in the city, and access to the city required high-level planning and resources back then.
Like most parents, the first introduction to the concept of money and savings that my children received was through owning a piggy bank. Although that wasn’t intentionally why they owned one, I have grown to realize that it actually is the first time I had a hand in teaching them about money.
Not much changed for me once my children graduated from the piggy bank. After all, I didn’t intentionally buy a piggy bank with the idea of teaching my son about money. However, as my oldest son grew and I began to learn more about having my finances in order, I knew I wanted to make sure that my children learned about money and what it meant to develop a good relationship with it. From then on, I became intentional with teaching my children about money. It is a continuous process. My children have graduated from piggy banks to wallets, and now to a savings account.
When my oldest son turned 14, my husband and I decided to take him to the bank to open a savings account as a gift for his birthday. I chose to use his birthday to do so because I wanted him to understand that having a bank account is a privilege and something to be valued. He was so excited and smiled the entire time we sat down with the banker.
I didn’t stop there! I used my son’s interest and hobby to begin teaching him about checks and balancing, saving versus spending, and instant gratification versus delayed gratification. For example, my son has a set monthly allowance. He is able to spend things on himself as long as he gets permission from us beforehand. However, when he uses up his allowance and wants to buy another game that his friends currently are playing or he wants to buy some specialized bonus characters for his game, I use that as an opportunity to teach and reiterate the value in savings (instant versus delayed gratification). We then go over the pros and cons (opportunity cost) in his decision-making.
Child psychiatrists say that the adolescent brain has a connection with immediate reward, and the idea of planning for the future doesn’t really make sense to them completely. Using these methods, my goal is to lay a foundation for my children that they can draw from when it comes to financial self-discipline.
This is an ongoing process, so I know I shouldn’t expect instant results. But it seems to resonate with my son. I still need to monitor his spending habits and have conversations with him. I try to draw a scenario from his personal experiences to teach him. I show him that because he spent his money on a bonus character, he missed the opportunity to purchase the new game and therefore missed the opportunity to play with his friends and has to wait until next month when he receives his allowance. Of course, the conversation and approach are different between my 14-year-old and my four-year-old.
One of the great things about having children so far apart in age is that I often apply the knowledge from the first child to the youngest. I trust it will make more sense as they get older.