Are You Preparing Your Children to be Financially Independent Adults?
July 6th, 2010 
Carol 
Parents want their children to have all the life skills they need to live happy and fulfilling lives. The current recession has brought our awareness of the lack of financial education in our society to the forefront. Managing money wisely should be an integral part of a child’s overall education, but it’s not included in the school curriculum. Because many parents feel inept at managing money themselves, they are uncomfortable teaching their children about it. Unfortunately, this often this leads to avoiding the topic completely and many children are never taught about money at all.
Take Action
For this generation of children, it is crucial that they develop financial independence in adulthood because in the future it is unlikely that there will be corporate pensions or government programs to take care of them. Our current economic situation clearly demonstrates that children with a strong financial background will have a big advantage in life. Parents don’t need to be financial experts to help their children learn about managing money, but they do need to take action. If parents can teach their children early on that true financial wealth is not about how much they earn but rather the choices they make with the money they earn, it will make a huge difference in the children’s lives. Having the ability and willpower to make good decisions is crucial for success and developing good habits at a young age is much easier than after bad habits have set in.
Start Early
Studies show that children form attitudes about money by the age of thirteen; so starting young is critical to developing good habits that will last into adulthood. If children learn from small mistakes made at home when they are young, they will be less likely to make poor decisions with devastating financial consequences when they are older. As children learn to make good decisions, their successes create more self-esteem and confidence and they continue to set and achieve larger goals for themselves. This cycle is a very important part of personal growth and development and parents can help encourage it.
When my daughter Natasha was four and a half and my son Max was one I asked, “What lessons should we be teaching our children about money?” This question ultimately led me to create my Zela Wela Kids book series. During the course of intensive research for the books I came across a few easy tips that can help parents raise money wise kids:
1. Create habits. It is invaluable for children to learn the habit of allocating their earnings early in life so that it is second nature for them as they reach adulthood. Teach them to divide their money into: giving, investing, saving and spending. This is a fundamental concept to building long term wealth.
2. Use cash in front of your children, it’s hard for them to learn good money habits if they never see what it is. Using cash will also be good for you– a study by MIT researchers found that people were willing to pay up to twice as much for a product when paying with a credit card and typically paid 20% more for the same item. If you use cash, you’ll spend less because you’ll feel more emotion when you hand over the money and you are therefore more likely to make a wise spending decision. Remember, your children learn by watching you.
3. Speak positively so your children don’t develop a negative attitude towards money, if they do, it will be very hard to change. Rather than saying “we can’t afford it” try saying “how do you think you might be able to earn the money to buy that? Let’s try to think of ten ways.” This will encourage them to work on their problem solving skills and help them use their imagination. If they really want to save for something special, they will be motivated and inspired to work for it.
Nancy Phillips is the author of the “Zela Wela Kids” book series, which provide parents a fun, family oriented way of discuss the key concepts of money management with their children. Phillips’ goal is to inspire children to learn responsible financial habits that will increase their quality of life and enable them to achieve their true potential. For more information about Phillips and the “Zela Wela Kids” series please visit: www.zelawelakids.com. “Zela Wela Kids” books can be purchased from www.amazon.com and www.authorhouse.com.
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