As with everything else, the things that children learn about money in their younger years stays with them throughout life.

How to help your children form a healthy attitude about money from a young age

The attitude towards money that your children acquire in their formative years builds the foundation of not just their values and behaviour as adults, but also determines the choices they make in life. It is ultimately responsible for the kind of life they end up living. 

Money is essential for all the essential things in life: security, stability, peace of mind, power of choice, fulfilling dreams, and more. It’s crucial that your children develop a healthy attitude towards money, but resorting to truisms such as ‘money doesn’t grow on trees’ or ‘a penny saved is a penny earned’ isn’t quite enough. You need to actively ensure that their understanding of money – earning, spending, meaning and more – is right. 

It’s only when you ensure this foundation is built can they make the right money decisions later in life – from saving and investing early to working hard to earn a good living. Read on to find out how you can help shape your children’s money attitude in a healthy manner.

Examine your money attitude 

Before you can even think about building your children’s money attitude, you need to think about your own. Are you someone who spends recklessly or gives into impulse purchases? Do you maintain a budget and stick to it? How do you allocate your income? Your money habits, good or bad, are something you should be aware of. This will help you improve your weak areas while being honest to your children about the importance of good money habits. 

Related: Are you setting your children up for a stable financial future?

Explain the reason behind ‘no’

Has your child ever kicked and screamed in a store demanding to be bought something, such as a new toy or candy? It’s important to explain why you’re saying no when it comes to money decisions, especially as they grow older. For instance, if your child wants an expensive new toy, you should explain to them the concept of discretionary expenses and monthly bills, and tell them that they should wait until their birthday or the next festival to get that toy as a gift. 

Don’t compare finances

It’s important that you don’t disclose your salary, net worth, inheritance, etc. to your children because it’s unnecessary and could lead them to develop either a superiority or inferiority complex with their peers. You should also ensure that you don’t teach them to judge people based on how much they earn, where they live, or what brand of clothes they wear. Do not compare your finances with that of others.

Related: When is a good time to teach your kids about money

Link money to hard work

Kids naturally learn that money is a valuable and sought-after resource. However, understanding that money is earned through hard work is a whole different lesson. Teach them that nothing in life comes free and that they need to make themselves useful and add value to earn money. To get them started, you could assign weekly chores at home and pay them a nominal amount for their efforts.

Teach by example 

Learning through entertainment, people say, is the way that children learn the quickest. That’s wrong. The way children learn the quickest is by observing and imitating the adults around them. So, you and your partner need to have – and showcase – unwavering money morals. Evading tax, faking bills, underpaying house help, etc. are practices you should avoid at all costs for many reasons. But especially so that your children can develop a healthy attitude towards money. 

Be honest when times are tough

Financial difficulties at some point or the other in a household is normal. If and when you and your partner are going through them, it’s good to take your children into confidence. Of course, the extent would depend on their age and emotional maturity. Make sure you don’t scare them; merely tell them what’s going on and what your plan is to overcome it. Keep a positive and upbeat attitude, so your children don’t stress about it. 

Related: 5 Things that happen when you don't teach your kids about money 

Don’t make money out to be everything

It’s not uncommon for people to think that money is everything, or that money is the only metric for success and happiness. Of course, money is central to a comfortable life, but it can never be everything. Such an attitude can make people do unscrupulous things or work themselves to the point of burnout. Either way, such money associations never quite lead to a fulfilling life. Make sure your children know that money is not the be-all and end-all of life. 

Inculcating these positive money attitudes isn’t going to happen in a session or two where you sit your kids down and give them a ‘lecture’ (as they might see it). But over time, through your actions, words, and decisions, you can incorporate these tips and help your children to look at money in a positive and solid way that will only help them build a secure life. How to talk to your children about financial problems?