How NOT to Teach Your Children about Money (A Personal Experiment)

“Kavya, what is money?” I asked my twelve-year old daughter recently, as she was deeply engrossed in a book.

Her answer stumped me, simply because I was not expecting it and in the way she said it.

She said, “Papa, money is something that, if we don’t waste, can get us bigger and better things in the future.”

“Wow!” I told her. “You deserve a hug for this.”

How Kavya defined money may not be its perfect definition, but it effectively contains almost the entire essence of how we must handle it (money).

It contains the importance of saving money by spending less money now, and letting the power of compounding grow that money so that we can maintain our purchasing power (and still have more money) in the future.

I was especially amazed at her answer because the same child, till about a few years ago, thought that money came from the ATM, and that her father could get as much as she wanted to buy as many toys as she could set her eyes on. That’s what most kids think these days.

Anyways, since then, it hasn’t been an easy ride for me and my wife to get the right money ideas in her brain…but then who says parenting is easy?

My First-Hand Experience in Parenting
I don’t remember how many times I have told Kavya to change her clothes after coming from school, brush her teeth twice a day, do her homework before going to play, and do anything else for that matter.

It starts with “Please do this!” and ends with “This is the fifth and last time I’m telling you to do this!”

I am sure if you are a parent, this is also a normal part of your daily life.

As parents, we ask, and ask, and ask, and ask…and if we are lucky, our kids cooperate after the fourth or fifth request or after a loud but otherwise harmless scolding.

We complain that our kids never listen to us, and ask other parents how they get their kids to behave, eat healthy food, and go to sleep on time.

If that’s not all, we consult the Internet and several books on bringing up well-cultured and disciplined children.

Then, even as we apply all those techniques, our kids just don’t listen. But, they do observe.

Yes, that’s the way kids listen to parents – not to their words, but to their actions.

While I am yelling at Kavya, she is watching me. While I am arguing with my wife, she is watching us. While I speak out my mind at rash drivers or lose my patience during traffic jams, she is watching me. While I spend money, she is watching me.

Our kids are watching our every move, even when they don’t listen to one word, at least not till we say it for the fifth time.

Our Kids Also Watch Our Money Behaviour
I have been a parent for just the past twelve years, so whatever I am suggesting below is from my limited experience.

The truth I have realized is that, as parents, we shouldn’t worry that our children never listen to us. Instead, we should worry that they are always watching us.

When it comes to money, I have realized that whatever little Kavya has learned has been by watching me and my wife handle our money.

So I feel proud to know that, at a tender age of twelve, she knows the importance of…

• Spending less than earning (she saves money every month out of her pocket money, which gets invested in her mutual fund account)
• Not following the crowd (she is fine ‘not’ owning a mobile phone even as all her friends do)
• Avoiding borrowing money (she is happy that Papa has no liabilities on his head and that’s why he will never have to go to work on a job to earn money to pay off any debt)
• Giving (she reminded us that the annual sponsorship of two kids are coming up due, and is always willing to give away her possessions to anyone who cannot afford them)
• Enjoying life instead of running after money (she wants Papa and Mummy to stay with her 24×7, even if that means lesser money to spend on dresses etc.)

There are many more things that she will learn about money as she grows older (at least this is what we as parents hope).

In fact, here is a broad plan I am working on to teach her and my six-year old son the several key ideas on money at different points in their lives…

Cheatsheet: What I’m Teaching My Children about Money, and When

This plan is not etched in stone and may change as per changing times. But I plan to follow it, like I have done so far.

I hope this cheat-sheet also guides you in your effort to raise a financially responsible child.

The Bottomline Is…
As a parent, I have learned that the only way we can design our children’s futures is by our own behavior.

So there is no point teaching them (or wanting them to learn) things we ourselves are not doing.

Telling them, “We should not waste money!” or “We should give money to the needy” will, in my experience, not lead them to do what we want them to do.

However, showing them how to not waste money and how to give to the needy will surely lead them to something good.

In short, keeping in mind that our children are not only watching us but learning from us should be reason enough for us to change our behavior before it is cast in stone for them and for their future generations.

I am just writing from my experience, however limited it may be.

I would be happy to hear views from the more experienced parents and grandparents on how they have inculcated safe money habits in their children and grandchildren.

Experience is, after all, the best training manual.