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5 Lessons Children Ought to Learn About Money

5 Lessons Children Ought to Learn About Money

They throw tantrums in shopping malls over every desire, from sugar-filled trivialities to dolls and — now — miniature drones. While mum and dad explain that they cannot have it their way every time for good reason, the child is probably wondering why their parents, perfectly sane and loving individuals, would dare to stand in the way of their happiness. Each advocating a strongly held position from which neither is willing to budge.

I’m yet to have kids of my own, but I oftentimes wonder how — in due course — I will land some important lessons about money, a topic of wide relevance. One that will ultimately shape much of their adult lives, with or without permission. It’s a touchy subject with vastly different cultural predispositions. I fondly recall some of my earliest interactions with money. Like my first entrepreneurial experience selling prepaid mobile credit to neighbours and friends. And my first goal savings towards an HP Laptop. These experiences and my education are among the many privileges I’ve been gifted to have a healthy concept of money. Here are some of the more important money lessons I believe children should be exposed to.

  1. Money Represents Opportunity. Simply put, money allows us access to the bare essentials for a full life. If Abraham Maslow’s Hierarchy of Needs Theory is anything to go by, the opportunity to function at one’s best is only ever within reach when the more basic needs have been met. These basic needs have their price. I believe it’s important for children to understand the role money plays in giving them the opportunity they have. Admittedly this appreciation will only truly be gained fully with hindsight. But on some level knowing that everything they are enjoying is financed somehow helps cultivate a sense of gratitude early in life. Like most parents, my parents always believed in the opportunity that education — one of the basic needs — represents. When I graduated with my finance degree my father shared a lesson that speaks to this point. He used the analogy of a knife in the hands of a farmer to illustrate the role of education for survival in the current day. A valuable lesson that stays with me.
  2. Money Should Be Earned. I am particularly grateful that I was never brought up with a sense of entitlement. My parents instilled in me the value of hard work early on. I had the occasional privilege of entering into my father’s workspace. I recall times when my sister and I would help out after school, stapling papers together in preparation for an assessment he would later give to his students. On some level I got to experience his work in a way that allowed me appreciate its value. A lesson which real life experiences have helped me consolidate. I hope I find a way to communicate this message to my kids. I’ll definitely be bringing them into my workspace somehow.
  3. Money is Good to Have. Or put differently, money represents convenience. I like the Oxford Dictionary definition of the word: The state of being able to proceed with something without difficulty. Most of us relate to this category of benefits as the finer things. An occasional holiday, a comfortable dwelling, a luxury car. These represent the wealth of options we have as consumers to enhance our lives, evidenced and emphasized by the messages of a global advertising industry tipped to hit the 1 trillion dollar revenue mark this year (2016). Of course we need to temper this with the view that nothing is good in excess. A lesson from the Law of Diminishing Marginal Utility which holds that (and I paraphrase) the more we consume, the less satisfying it is. This might be a tricky one to translate for kids who would normally only think about money when they need to ask for it. An essential one nonetheless.
  4. Money Can Be Used To Do Good. A very important point to note is that money represents the opportunity to give back. I think it’s vital to have some view of money that is not based on meeting our own needs. This perfect balance to the view that money is good to have can help us all appreciate that financial wherewithal should not detach us from our humanity but rather help us connect with it. I like the initiative by Warren Buffet that encourages the world’s wealthiest to commit to philanthropy. It speaks to the need to view wealth as an opportunity to contribute meaningfully to humanity.
  5. Money Has Its Place. Key to appreciating the value of money is understanding what’s more important than it. The fact that the phrase ‘value for money’ is universally accepted as reasonable may lead to the fallacy that value and money are inseparable. It’s good for kids to realize early on that there are things in life that money can’t buy and have some notion of value that does not involve money. Dignity, authenticity, goodwill, respect. For all its benefits money has its place and is in fact secondary to core values that guide our life’s decisions. I’d want my kids to learn the limitations of money and that more of it does not exactly result in a more meaningful life.

These are my views only. I hope this article provides some help to parents looking to shape their own views on this subject as a basis for training their kids.

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