Many parents are currently not in the financial position they would like to be in. As they struggle to manage their expenses, they worry about the example they are setting for their children.
After all, how much of what you do has to do directly with the financial success of the child? According to expert Neale Godfrey, what you do plays an extremely important role.
Godfrey, a YPO member, is the CEO and president of GreenStreet Commons Inc., which provides financial education and environmental lessons for children from preschool through high school. Its programs have helped more than 2 million children gain financial knowledge and taught them how to manage money.
In 1972, Godfrey started in banking with Chase Manhattan and became president of “First Women’s Bank”. She noticed that she did not take care of her children’s financial education when she understood that the little ones believed that money “grows on trees”. Starting from that moment, he created programs and materials through which children, but also parents, can be financially educated.
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Moreover, Godfrey formed a real bank for children in partnership with FAO Schwartz in New York. Since then, he has published more than 27 books, including a New York Times bestseller, and appeared with Oprah.
Godfrey found 8 mistakes that parents can make that have a destructive effect on the child’s financial education and implicitly on his success.
1. Giving money an exaggerated importance
People do many things when they have the promise of a financial reward, which is normal. We all have a sense of preservation and do things that help us survive and have a pleasant life. Not in all cases what people do leads to a financial reward. There are other important things that they gain when they make efforts.
It is important not to convey to your child the idea that money is the most important thing they can get, and above all, it is necessary to prevent cases in which children come to consider that when they do not receive a financial reward, then the effort is not worth it.
“Money is the reward for work,” Godfrey says. “In no case should it be a reward for good grades or appropriate behavior. And these are responsibilities.” add this.
It is advisable to teach the little ones that personal development, evolution and help given to others can be the same or even more satisfying than a financial reward.
2. Don’t teach him the value of money
Every parent hopes to be able to give their child what they need and never feel that they don’t have enough or how much they need. However, many parents avoid discussions about how money appears and how a budget works.
Godfrey warns in this regard: “If the little ones see their parents spending money and don’t understand how it appears and how it works, spending will be the only thing they will associate it with. And when they have a card, they will spend without limit. It is important to explain to them how money works and what are the consequences of its inappropriate management.”
The value of money is important to your child’s success. They must not understand that money is an unlimited resource and underestimate the consequences of inappropriate choices.
3. To teach them that abundance is a value
According to Godfrey, many parents put too much emphasis on how much money they earn, giving the impression to children that their value is reduced to the value of the family’s financial resources. We are not represented by money, but by the values we have.
Please help your child understand that money can be used for charitable purposes and useful to society, but it is not a substitute for compassion and morality.
4 Give him the impression that he has the right to do anything
Parents love their children and many of them say “yes” every time the little ones have a wish, even if it’s about playing another 10 minutes on the computer.
Giving in to these demands too often, especially when it is not beneficial, will give the child the impression that he is entitled to be able to do and have whatever he wants, whenever he wants.
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Godfrey suggested that from the very beginning, you explain to the child that your answer will not change regardless of his reactions and behavior.
5. Don’t encourage their generosity
Godfrey believes that every child can be kind and generous, regardless of how difficult it may be. However, she is surprised by how many children have the impression that being generous and doing charitable acts means attending various galas and clinking a glass of champagne. And this happens because they do not see what else the charitable acts entail.
It is advisable to involve the child when you carry out charitable acts or when you participate in organized activities. The child must understand what the impact is.
6. Show them the problem, but not the solution
Problems are a natural part of life. Children often see problems and conflicts as something negative, which they are afraid of, especially when the conflict is between parents.
“If the little ones hear you arguing, the best thing is to be open with them and explain to them that sometimes, when there are contradictory discussions, the tone rises,” Godfrey says.
If the little one understands that there is a conflict and that it is normal that sometimes there are problems, then things are no longer so scary. The most important thing is to show him that there is a solution and that it can be applied.
7. Do not approach the idea of a job during the summer
A job involves a lot of responsibility, which takes various forms. Depending on the child’s age, it is extremely beneficial for the child to start a job during the vacation, the time for school remaining unaffected. Thus, the child comes into contact with the first responsibilities in the adult world.
“Moreover, if the little ones start working from a young age, it forces them to learn about the value of money and what it means to work for them. That way, they won’t take them away.” Godfrey says.
8. Do not prepare them for a future in which you are not
When Godfrey talks to her kids about financial responsibility, one of the most common questions she gets is, “What will happen to me if mom or dad isn’t around anymore?”
Children ask themselves this question much more often than their parents realize. Even if they don’t seem to care at all from this point of view, parents need to talk with them about how things would look without them, especially in cases where there is a greater chance that this will happen before they do. become adults.
“Many parents tell their children not to worry, that everything will be ok. This answer creates more anxiety because it does not offer anything concrete. It does not explain to them what will happen to them, who will take care of them if they will have what they need, where they will live, or if they will have financial resources to ensure their lives. Godfrey says.
Don’t forget that the child’s success depends on what he learns from you and what he sees you do and that it is never too late for financial education.
8 savings tips to pass on to your child
One of the secrets of success today is the art of saving, and this is what most of today’s successful people have said who have explained the strategy they applied to get where they wanted to be. Here are eight tips to pass on to your child about savings:
1. Keep money for yourself before making any expenses
Save part of the money you receive as soon as you have access to it. Don’t wait to spend and only then see if you have money left and how much to put aside. Ronit Rogoszinski recommends making an automatic transfer when you receive your salary and not thinking about it, not changing your mind, and leaving things exactly as they are.
2. Save for emergencies
An emergency savings account is the beginning of a solid financial situation. It is always good to have a reserve that will ensure your survival, regardless of whether or not unexpected situations appear in your life that involve expenses that you did not take into account. The urgent category includes situations of greater or lesser severity, from a car repair to the loss of a job or illness.
3. Limit expenses as much as possible
Saving often starts by cutting expenses. Regardless of whether you give up a more expensive cafe or the salon you frequented weekly, usually people choose to give up those things that are not necessary.
When you choose to save part of the money, don’t leave it in your wallet or somewhere around the house, so that you can have it at hand and spend it when you feel like you can’t take it anymore. Make a savings account so that the money you want to save lasts more than a few days.
4. Give up one habit
To have an easy start, choose to give up one thing that you spend money on and that you will not miss very much. If, for example, every morning you buy your coffee and breakfast from a coffee shop, you can choose to prepare your breakfast and coffee at home so that you spend less money.
Many times things seem very difficult when we try to change everything at once, so a better solution is to start with small steps.
5. Get creative while making money
There are two ways to make more money: you get an extra job, possibly part-time, or you sell things you no longer need.
A limited-term part-time job can be an effective strategy to make more money to buy a car, for example. It is not recommended that it last very long and that you struggle with two jobs, but it can be an effective option for something in the short term.
6. Postpone any expenditure for 10 days
Of course, we are not referring to food or other necessary things, but to those expenses that we can do without and which, sometimes, we regret later. Try to postpone an expense for ten days and if even after those days you still want to buy that thing, then all you have to do is take action. Instead, you will be surprised to notice that in many cases you will no longer want to buy those things, and this ten-day rule saves you money.
7. Make shopping lists
Determine before you leave home what you need to buy and make a list that fits your budget. In addition to the list, you can leavgoe with a fixed amount so that even if you want to buy something that was not on the list, you won’t have to. If you manage to implement this rule and respect it, then you will most likely save enough money.
8. Cook your food
Although it seems faster to go to a fast food and eat in the city, know that it costs you more. It is indeed more effort to cook at home, but now it depends on what is more important for you, to be easy to access or to save money.
All these tricks are meant to help you save money, depending on your needs. The faster you pass them on to your child, the more chances he will have to save and be financially successful.
