Teaching kids about money
By Lisa Jaffary
September is the month of new beginnings. In childhood, we looked forward to starting a new grade with a new teacher. Our parents bought us new school supplies and clothes. This taught us that September was the real beginning of the new year.
In college, university and in the work-life, we continue to embrace new beginnings in September.
September also gives the opportunity to discuss money with your children. Do you give them an allowance? Allowances are common for children over age 5 or 6. The best time is to start when your children understand that money can buy things they want..
The important part is consistency – choose either weekly or biweekly. Use birthdays as the time to give increases.
When discussing allowances, ask them to divide up their money into three portions: for example, 70 percent to spend, 15 percent to save and 15 percent to give. Percentages may vary. Portioning out an allowance teaches valuable money-management skills to your children. This fosters a life-long balanced money approach.
For their spending portion, they can choose what to spend their money on. Discuss ideas together. Some children choose to buy something every week, others choose to save up and make a larger purchase with more of their money.
Their saving portion can be deposited into their own bank account. They will see how their money grows over time.
Talk about giving and share ways in which you give. Do you support local charities or non-profit organizations? Talk about these groups, show them the websites and discuss how they collect donations and what they do with their money. What do they do in the community?
To help your children decide on their organization, ask what inspires them. Allow your children to decide where they want to give their ‘giving’ money. This empowers them and gives them a strong emotional connection to their gift.
There are ways to increase their emotional connection to their giving money. Make a poster board, visit the organization, meet other donors, write a letter, attend or start a community fund-raiser.
By encouraging your children to give, you are also teaching them to care for others, even people they have never met. Often, children have a close connection with giving to animals and nature.
In today’s world, giving can extend locally or globally. Through your travels in the Okanagan or around the world, there are many teaching moments that may touch your child’s heart. Your career, connections and relationships may open their heart. Invite your children to activities with your community organizations. Volunteer as a family at an event.
Giving helps children develop new levels of understanding and compassion. It also helps them be passionate about learning more about issues that touch them emotionally. Many adults create very successful careers around what they learned as children. Their childhood passions develop into research, businesses, writing and travelling. Giving also helps us to understand our values and motivations.
You never know what will inspire your children. Every experience of generosity touches them. Giving reaps rewards. Every act of giving is noticed by the universal laws of nature. Rewards may be instant or may take a while.
Allowances give you the opportunity to teach your children about money.
Choose an appropriate allowance amount, discuss percentages and create systems to fulfill all portions – spending, saving and giving.
Show them how to spend wisely. By teaching them about saving, they will establish lifelong habit of putting money away for the future. What a great habit!
This September, encourage a new level of giving within your family. Let it start by giving an allowance to your children and let it grow from there. This is a lifelong gift to your children and the world will be a better place.
Lisa Jaffary is a life insurance agent and financial advisor with Points West Insurance Services in Kelowna. She is a member of the Advocis, the largest professional association of financial advisors in Canada. Call her at 250 861-5166 or e-mail at email@example.com if you have any questions, or a suggestion for a column topic.