Many kids in Kuwait grow up in a world of extreme privilege… home help, toys galore and little understanding of the value or meaning of money. Teaching them the basics of finance however, is one of the greatest lessons you can give them. Teach them to have an understanding and appreciation of money and you set them up for life, whatever career paths they end up choosing. But how to do so, without boring them to death with talk of balance sheets and credit notes? How do you make it fun?
Here’s our advice:
• Start to give your kids little chores and in reward, give them a small financial reward. Saving this in their pocket money for a planned trip to a toy store will become an exciting goal and teach them that new toys don’t just turn up like magic, but rather they are exchanged for hard work and hard cash!
• Don’t be shy about discussing finances with your partner in front of the kids. There’s no need to talk in detail about your portfolio but general chit-chat about banking will arouse their curiosity and hopefully encourage questions
• Get them involved in money-making activities wherever possible.
• Equally, charity fund-raising is another option and will also teach your kids important lessons about how fortunate they are and the importance of gratitude
• Encourage kids to save by getting them to think about a toy they’d love. Children shouldn’t expect the latest toys when birthdays come around. Rather they should be encouraged to pinpoint what they want and then learn how to raise the money to at least contribute towards it. This could be the best possible lesson in priorities and trade-offs
• Let them get involved at the check-out of the supermarket by giving them cash to pay for your goods and letting them receive and count the change
• Weekly pocket money is a great idea. It doesn’t matter how much it is but the point is that they can then learn about financial goal-setting and about value. The amount should be fixed so they learn about budgeting and should they want to ‘earn’ any extra, they need to do chores or errands for you in exchange
• When you’re taking money out of an ATM machine, make it clear to your children that the bank notes aren’t just being handed out for free. Rather, that mummy or daddy has worked hard every day in return for a monthly salary and the bank keeps this in a safe place for them. Tell them also that a portion of that money goes directly to such things as your home, holiday funds, school fees and so on…
• You can easily introduce slightly older children to the concept of bills by getting them to pay their own. Teenagers, for example, should be given a budget for their mobile phone bill and the requirement to pay their share. If they exceed one month, it’s up to them to cut back the following month. And if they fail to do that, take it off them!
• Finally, be sure to practice what you preach. Kids learn by ‘modelling’ their behaviour on those of others and if they see parents with a sense of financial responsibility, then they too should follow down the same path
Ultimately, empowering the next generation with the know-how and tools for financial freedom will give them great foundations for good habits in later life. And of course, you might even end up benefiting directly, should it become their turn at some stage, to look after you!