How to teach children the wise use of money?


Piggy bank.

“Mum, buy me this!”

How often we have heard those words!

As children we probably used them ourselves.

Sometimes our mother would say “Yes,” sometimes “No.”

Occasionally she had the time to explain why, but usually we just learned that there were some things she would buy, and some that she would not.

That’s the way most children learn to use money—from example.

In fact, surveys have shown that many parents do not have any planned way of teaching their children how to make wise use of money.

You may think you really teach your children what to buy and when, how to compare prices and judge quality, and how to stay free of modern materialism.

But it might be good to ask yourself:

“When was the last time I really made a conscious effort to do that?”

It could be longer ago than you thought.

Whether you have been making that effort or not, principles and suggestions in this article could be of value to you.

This is important because there are people who are making a conscious effort to teach your children principles that may be different from ones you want them to follow.

These people have spent their lives learning how to persuade, and their opinions on the importance of material things may differ from yours.

Who are they?

Let us let them speak for themselves:


What advertisers want child to learn about money?



Some years ago an advertising firm that appealed to children ran an ad that told merchants and advertisers:

Eager minds can be molded to want your products! . . . Here is a vast market for your products. Sell these children on your brand name and they will insist that their parents buy no other. Many farsighted advertisers are cashing in today . . . and building for tomorrow . . . by molding eager minds.”

From a very young age children are the target of advertising designed to make them want more material things.

Highly skilled people study how to appeal to your child’s “inner needs,” and to create a “demand” for their product.

In countries where television is used to advertise children’s products, this is a main medium used to persuade the young.

It begins to work even before they are old enough to read.

Three college professors surveyed children between the ages of five and 12 years, and found that they were exposed to an average of nearly 400 television commercials a week—some 20,000 a year!

These professors commented:

The ability of children to . . . avoid being ‘misled’ or deceived is an issue of considerable current interest, particularly in the light of this high exposure children—even very young ones—have to commercials.”

They found that 56 percent of the kindergarten children had low awareness of “why commercials are on TV,” and that about half thought “commercials always tell the truth.”

These children are very young, but advertisers spend great sums of money to reach them because they believe that lifelong habits already are being formed.

The professors also found that only about half the mothers of these five-year-old children talked with them about commercials.

They commented:

Many kindergarten mothers appeared to be missing an opportunity to teach their children to understand the intent of commercials, an understanding that can help them to begin to function as effective consumers." 

However, they found that even young children can “filter” advertising messages, and that this ability can be taught “even to kindergarten-aged children.”

Often this has not been done.

The editor of Seventeen, an American magazine for teenage girls, has been quoted as saying that his young readers are a good market because they “have not yet become cynical about advertising.”

It is good to take the initiative.

Talk with your children about advertising.

Point out that it can provide a great deal of information, but that its obvious purpose is to get people to spend money.

The business people can increase their profits if they can get you to want products that you do not really need, such as new gadgets and new styles.

More important than the money that might be wasted is the materialistic viewpoint this can teach—the idea that buying leads to happiness.


How to teach children money skills ?



How can you teach your children right attitudes toward money and how to use it wisely?

One way is to take them with you when you shop, and to talk about things you buy.

If encouraged, many youngsters will make a game of knowing prices.

You will think you almost have a walking computer, as they remind you that the price was lower in another store.

The next step is to teach about quality.

You might ask: 

“Why do you think this sweater is cheaper?” “Is that one worth the extra cost?” “How long do you think the red one would last?”

The child learns how to weigh cost and recognize quality—abilities that will stand him in good stead as the years go by.

Young people have a harder time judging between well-made products and “junk,” simply because they have not had as much experience as you have with products that did turn out to be junk.

Thus, you do them a service when you point out why you picked one item over another, and explain why you think one would last while the other might not.

You can teach many things in this way.

A father, about to buy a new car, turned to his small daughter and asked which color she wanted.

She answered: “Black.”

He commented: “Black shows dust easily—do you want to wash it?” 

She answered: “No, maybe we should get a lighter color.

Later, a woman who had been standing nearby said: “Imagine, letting a child pick the color!”

But the child had not chosen the color.

The father had simply taken a moment to teach his daughter something about choices.

How much wiser many decisions would be if more parents took time to teach their children!

What about deciding whether you can afford something?

When you see a dress or a tool that tempts you, you probably weigh whether you can spare the money from what you will need for groceries, the rent or the mortgage, and other obligations you have this month.

However, the child does not know that you weighed those various factors.

Why not explain, as you are walking through the store, what you took into consideration, and why you decided the way you did?

Your youngster does not have these obligations, and thus may be more impulsive in how he uses his money.

But it is good for him to know, even now, how such decisions are made.

Probably you decide very quickly whether an advertised sale seems worth while or not.

Why not point out to your youngster why you decided the way you did?

This takes time, but it can pay off in the child’s attitude now, and in his capabilities when grown.

Remember that loving instruction and a good example can be far more effective than criticism.


Contentment object lesson 



Another very important matter is whether your youngsters will realize that there is more to life than just owning things.

Or will they be convinced by manufacturers, advertisers, stores—and even by their friends—that happiness comes from things they buy?

In earlier generations people felt good about themselves because of things they produced.

A man was an excellent cabinet-maker.

A woman baked marvelous pies, or made beautiful quilts.

A boy built a radio set, or raised a prize calf.

Today we make fewer things.

Most of what we have is produced by machine.

Manufacturers and sellers know this, and encourage you to fill the gap by consuming.

They suggest you can “be somebody,” not through developing a good personality or an upright character, but through things you buy.

In their book Supershopper David and Marymae Klein says:

it’s not surprising that many young people try to distinguish themselves by being the first on their block or the first in their group to buy a new record, electric guitar, surfboard, or walkie-talkie—all of which represent consumption, not production. And even more young people flock to buy these things not because they genuinely enjoy them but simply because ‘all the other kids have one.’ This gives them a certain sense of equality—but it can also be brutally expensive, because it depends on continuous buying in order to keep it up.”

How can young people be helped to see that “I am what I own” is not a valid basis for a happy life?

A great deal depends on the parents’ attitude.

As a parent, are you more concerned with things than with personal development?

Do you help your children realize that they are important because of what they are, not because of what they have?

Do you make them feel good about themselves, rather than having to show off possessions?

They know that others appreciate them because of the kind of people they are trying to be—people who demonstrate their love, and who try to do what is right.

In the lives of such youths there is a basis for real joy and satisfaction from accomplishments, rather than the shallow feeling of temporary importance because of possessions.

It is important for us to set such things of real value before our young ones, whom we love so much, and who look to our example as they mold their own lives.