How to Teach Children Spend Money
Jul 21
It is indeed a challenge to teach children to learn how to save money. Finally after some trial and error with my eldest daughter, I have learned that the best way to teach children is by practice and this would entail you– the parent to entrust your children some cash at their own disposal in the beginning.
My eldest daughter is now 9. She has a fixed allowance of a hundred pesos per week, and after a huge trial and error hilarity, she now know how to manage her allowance. End result? By the end of the week, she reports that she still have some cash left because she was being “economical.” Such a huge word for a 9 year old. I may have to consider talking to her about the science of supply and demand, but I think she knows that already but does not really understand that it is the same all over the world.
So how did I do it?
A year ago, I made a stupid mistake of forcing her to save. Forcing a child to save will never work as they needed to learn the most important art of all. I think it is important to encourage the art of spending first before teaching children how to save. The more she understand the difference between wants and needs, you’d know you are in the right direction.
When teaching a child the art of spending, you must teach your child the ability to recognize that in every store, you always have a choice. You need to check out prices between goods. It is also important to allow your child to recognize the differences between certain products and why she thinks the other is cheaper or more expensive than the other. For example, (I usually do this exercise at the groceries’ milk section). From there, I ask my daughter what she wants first (I already know what her answer was going to be ofcourse) and we both said, “Pauls.” Then I asked her why she prefers Pauls. And she said cause it tastes good and Daddy said that Australian goods are better than the locals. So I asked her, how much is the Pauls milk and she said its P69, Mom. And before I could ask her the follow up question, the smart girl said, “Oh, Mom, we can get Paul because there is only P2 difference between the local milk and imported.” Smart… she is making a huge display of preference here and she is prepared to justify that choice. Ok.
Then I asked, why do you think the local milk is cheaper by P2? Then she looked at the shelf again said, “Ah, I really do not see any difference cause their boxes look the same. And both said 1 Liter.” (Ahhh, observant…) Then she said, “Ah, I know what the P2 difference is!!! Its because Pauls is from Australia! And it takes more money to bring it here than the locals. Ahh, am I right?”
Then I said, yes you are right, kiddo. So why don’t you go ahead and check out the rest of the aisle before deciding… She walked down the aisle looking at the entire shelf of fresh milk and she said, “Hey, Mom! Selecta Milk is only P34! Hey, probably we should buy it… but I bet it won’t taste as good as Pauls…” She started moving away from the aisle and I recognized that she was losing interest already, so I asked her, “Why do you think its cheaper, baby?” She looked at both and said, “Ahh, they both look the same… except that Selecta said its Fortified while Paul says its Fresh milk.” Then she looked up to me and asked, “What’s fortified?” Then I looked at her while trying my best to remember if fortified milk is best because its fortified with other vitamins and minerals to balance out the saturated fat in pure whole milk.
Learning the differences why products are priced differently from others is good. This help children to go beyond what they see-packaging. Although my children are highly influenced with brands because of what they see everyday (say– Jollibee, McDonalds, Colgate and Coke) Just because they see these brands on their faces, does not mean they are the best and not realistically most economical. (BAH)
Anyway, when children learn to identify and formulate how those prices are the way they are, they’d be able to more or less compare other products from one another and from there make smarter spending decisions.
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