Learning the Value of Money

Children need to develop a healthy understanding of money
By Ruth Rehbock

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When I was 10 years old I used the R40 I had saved to buy myself a watch. It was the first thing I bought with my own money. I still have the watch, but I have over the years lost the carefree, positive attitude I had towards money when I made that first purchase as a child. If you search for “children and money” on the internet you will find a plethora of books, articles and programmes that teach children about money, but the one thing that stands out is how our attitude towards this commodity has changed. We have to introduce children to money as early as we can and be active in giving them opportunities to learn how you get it, how to spend it and how to save it. Children of this generation have a unique opportunity to learn good financial habits early in life.
Teach good habits
Linda Gibbon, an educational psychologist in Joburg, says delayed gratification is one of the most important factors in developing a healthy relationship with money. “A good first step is to teach children the difference between needs and wants, according to their level of understanding. It’s important for a child to recognise that they can’t get things on demand.” Gibbon says learning to tolerate not getting what you want immediately is critical to learning to set goals and to work towards achieving them. For her, a child must learn that “needs” such as food, a bed and schooling are a right, whereas “wants” such as toys, games and cellphones ought to be appropriately open to negotiation. “As with all things, when to give or withhold ought to be based on a healthy relational foundation between parent and child,” she adds.
In our consumer-driven society we are at risk of placing too much emphasis on material objects. “More often than not, adults and children tend to base their self-worth on what they have rather than on who they are,” says Gibbon. It’s important to help our children value other things such as being a good person; taking responsibility for important things, showing kindness and compassion towards others and respect for parents. And the idea of respect is critical too when it comes to your child’s relationship with money.
“I strongly believe that learning about money in junior and primary school is imperative. Learning the life skills involved with handling money equips them with knowledge they will use for the rest of their lives. You can see how empowering it is when the children are able to check their own change after buying tuck,” says Margi Kopping, a Grade 2 teacher at King David Junior School in Joburg.
As far as learning about money at school, and how it works, children are taught economic management sciences (EMS) from Grade 7 as part of the curriculum. This involves understanding who creates an economy, how it functions, 21st-century banking technology and how to write up a business plan. Other useful aspects covered include drawing up a budget, types of personal income and the skills needed to be a successful entrepreneur.
Respect and share
One of the problems parents face is teaching children to develop a respect for money. They need to understand that it doesn’t come from a machine in a bank or shopping mall but from hard work. “Give your child tasks for which she will earn money, but also instil an understanding that some tasks don’t have a price tag. Children need to know there are things they must do that are based on what’s good for them and the family,” says Gibbon. “Don’t reward a child materially for managing their daily (chores).”
The other no-no is using money to make your child feel guilty or threatening not to give or to take something away, to discipline them. If you use money in this way you will teach your child that money is a tool of praise or punishment, and they will possibly use it against you, and others, to the detriment of their personal relationships. And the corollary is also true. Don’t allow your child to manipulate you into getting them what they want. The refrain: “I am the only one who does not have a... so you have to get me one”, is used to make you feel guilty, and it is exacerbated by the fact that many 21st-century children learn to define themselves by, for example, access to technological gadgets.
One of the ways in which we can teach children responsibility and the power of money is by sharing it with others. “Charity and sharing are values learnt within the family, at school, and within communities, and parents should persevere with the lessons even though sharing requires a degree of sacrifice, which little children struggle to understand,” says Gibbon. And, as always, watch what you say in front of your children because they will emulate you. “Negative speech and derogatory statements about others who are less fortunate will leave a big impression,” she warns. “The best thing you can do is to help your child understand why we share and, most importantly, to act on your own words. If you are compassionate towards others, you will impart the lesson of charity and caring to your children.”
Dos and don’ts around children and money
Talk about money openly Explain how you earn the money that pays for groceries, toys and school fees. Convey to them how it’s far easier to spend money than to earn it. Answer their questions honestly.
Don’t give money on demand If you do, it confuses wants and needs and doesn’t
allow them to learn that once they have spent their pocket money or savings, they have to earn more.
Make it possible to earn money at home This way they learn that work leads to reward. But be sure to keep a few tasks that must be done without any incentives.
Give your child tuck money Be sensible about how much is needed and how much items cost. Tell children not to be fooled if someone asks for food in return for friendship, for instance.
Teach children to save Give children a sensible amount of pocket money that’s related to your budget and to the child’s age. Provide a piggy bank or open a savings account for an older child (most banks now offer safe, inexpensive accounts for under-16s). Offer guidance on how best to manage their money.
Explain the difference between cash and a bank card If your child is able to understand, explain that using a card when your money is used up leads you into debt, as owing the bank will cost more in the long run. Show them how they can get access to their accounts using the internet.
Avoid exposing children to family conflict around money When parents are separated or divorced, they may disagree constantly about money issues, and children may feel they are a financial burden. Negative feelings about money can lead to more serious problems.
Explain how saving and investing is important for the future This applies to toys, books, holidays, education or eventual retirement.
More reading
  • Raising Money Smart Kids by Janet Bodnar (Kaplan Publishing)
  • Raising Wealthy Kids: Seven Steps For Creating The First Financially Responsible Generation by Melanie Jane Nicolas (Kids Wealth International Club)
  • The Child Who Finds Money – Bedtime Stories For Children by MassiMo (CreateSpace Independent Publishing Platform)
  • Little Kids Big Money: Tools for Teaching Kid Friendly Finance by Andrea Travillian (Smart Step)
  • What’s in the Yellow Envelope? by Leoni Webster and Annelie Sdralis (Money is Childsplay CC t/a Money4kids)
Give in order to receive
  • Teach children that the recipient of your donation also has dignity. Charities are not the dumping ground for things that are beyond repair. For example, through the Santa Shoebox Project, children can get personally involved with giving to underprivileged children throughout South Africa. Ask your children’s teachers to put collection tins in every classroom.
  • Relate sharing to the child’s experience and don’t use guilt to get your child to share with others.
  • Pick a worthwhile charity for the family to sponsor. Decide what each family member is able to contribute, whether time or money, and only involve children in age-appropriate tasks or commitments. A few well-known charities are Choc, St Luke’s Hospice and Childline.


Lorraine wrote 6 years 32 weeks ago

I found this interesting.

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