You don’t have to be Rich to Successfully Teach your Kids about Money

I’ve got another great guest blog for you today.  This time from Nancy Philips who is the founder of Zela Wela Kids, a fantastic resource for teaching your kids about money (and good for grown ups too!)

Parents – You Don’t Have to be Rich to Successfully Teach Your Kids about Money

 In the past several years people all over the world have experienced major shifts in their financial lives.  Millions have experienced job loss, foreclosures and bankruptcies. This has parents everywhere wondering, “Can I teach my children good financial skills when I’m facing major challenges myself?” The answer is absolutely “yes”!!

How is this possible? Because there are very simple things you can say to your children and do with your children that will begin to provide them the hands-on experience they need to develop their self-discipline and decision making skills.

The key concepts for success in teaching children about money are:

1.  Simple Relevant Messages

Talk about money on a daily basis in an objective way so your children learn that they can effectively begin to manage their own money and thus control their own financial future. The lessons don’t have to be long, just relevant, consistent and fun or funny whenever possible, this will make them more memorable.  You can talk about why you need to buy a certain item, the cost of things, the difference between a need and a want or why it’s important to save for what you want. Awareness is the first step to learning.

2.   Frequent and consistent discussions

Financial education is not about theory and hearing something once. Your child needs to get lots of “doses” of information so that they begin to think about how to problem solve and create solutions when it comes to prioritizing and decision making. When they learn one concept it will allow them to then think differently when they learn another concept as it relates to the first. There is no rush to teach them everything quickly. It’s far more important to make these types of talks a regular part of everyday conversation.

 3.  Hands-On Practice

Whether you’re learning an athletic skill or how to drive a car, you may learn some of the information from a book but to really master the skill you must get plenty of hands-on practice. Financial skills are exactly the same. Let your child handle money regularly so they have the opportunity to learn from the consequences of their decisions and refine those decisions in the future. There is far less at risk if they get plenty of practice with small amounts of money when they are young. An allowance is the most common way for young children to gain the opportunity to manage their own money on a weekly basis.

Once your child is about five years old, help them learn how to divide all their income into four categories – give, invest, save and spend. The “GISS” method of money management is one of the most powerful concepts for building wealth. The framework helps children learn good numeracy skills as they manage their own money for different purposes and begin to set goals. Read more about the GISS method as it pertains to children here. http://tinyurl.com/7m7trbt

4.  Positive, Encouraging Environment

A person’s financial “blueprint” or attitude towards money is developed during childhood by the people raising the child. As such, it is of utmost importance to try to be as objective as possible when speaking about money in front of your child and to avoid speaking negatively about it. Comments such as “you’ll make us end up in the poor house” or “we’ll be living on the street” can be devastating and long-lasting for a child. The family financial situation is not the child’s fault and they should never be put in a situation where they feel responsible, they are not emotionally developed enough to handle it. Instead of saying things like “we can’t afford it.,” which shuts the conversation (and their hope) down, try something like “how do you think you could raise the money to buy it?” This question shows the option of success and creates the opportunity for problem solving. Brainstorm with them and say, “what are ten ways you could raise the money? Let’s write them down.” This will get their brain working and they will begin to take the steps to achieve their goal if they are truly serious about wanting the item.

Your current financial situation is a reflection of past events, decisions and actions. Your future financial success, and your children’s, depends on the actions and decisions you make starting today. Your children don’t need any complex investing lectures, just simple, consistent real-life lessons and plenty of hands-on practice. Teaching your child may just help you as well. As they say, they best way to learn something is to teach it!

Nancy Phillips is the creator of the Zela Wela Kids book series and products which help parents teach their children financial and life success skills in a fun and inspiring way. Her website is:  www.zelawelakids.com

 

The Simple Things in Life

I’m just in the middle of writing my next e-book – Free and Low-Cost things to Keep Kids Occupied and whilst writing it I was reminded of a day out with my son, my sister, my niece and my Other Half shortly after my 40th Birthday earlier this year.

The weather wasn’t great but I’m still a firm advocate of getting out in the fresh air as much as possible.  We put on our jeans, waterproofs and walking boots/trainers and packed a basic picnic and took the kids to a local country park “The Museum of Welsh Life” which offers free entry and plenty to see and do as well as having plenty of room in which to run around and let off steam.

What struck me is how much fun we all had without spending a penny and as soon as the grown-ups got involved in the kid’s fun it all got even more fun.  Watch this video (I’m the one in red) the kids had been rolling down a bank but then the inevitable cry came “Come on Mum, you do it” well, I’m sure you can guess the rest, ignoring the various people walking past and in the general vicinity both my sister and I (and the Other Half) reverted back to childhood and got involved and we had such a laugh. We rolled down that and various other banks at least half a dozen times. The kids did too as you’ll see.  I’m still not sure who had the most fun that day – the adults or the kids?

What it also did  for a few hours was make me forget about the difficult situation I was in and focus solely on having fun and a good day out with my family.  Try it one day, lose your inhibitions, revert to childhood and see what a difference it makes.  You’ll probably wake up the following day aching but you’ll have had fun.

So often, when we’re in the depths of despair we forget about the simple things in life that can really lift our spirits.  I’ve spoken many times about being grateful for the simple things but how often do we actually take time out to acknowledge them?

What will you do this weekend to forget about financial difficulty or bankruptcy and create fun, laughter and happiness with your family?  What’s your Simple Thing in Life?

Daydream Believer

For years I have known exactly where I want to live.  Down to the very street. It’s one of the most exclusive addresses in my neighbourhood and even as a teenager I used to say to my parents, one day I’m going to have a house or flat there.  However, as the average house price in that street is around £1.5m and flats start at around £500,000 I’ve never really expected that dream to become reality.  Even less so since I became bankrupt.  The dream has been filed away along with other childhood dreams like wanting to be a princess – I used to dream of living in a castle with my handsome prince and wearing a long flowing gown and pointed hat with a veil attached. What girl didn’t?  OK, so I just wanted the dress!

As I’ve grown older I’ve compromised on my dream home.  It became; I want to live in a house on top of a cliff with sea views to the front and countryside to the rear.  Well, I’ve almost got that compromise – I currently live in a flat on top of a cliff with sea views so fantastic that when people come to visit I spend most of my time talking to the back of their heads whilst they stand in my picture window looking at the view!  And that compromise was achieved whilst bankrupt – I looked at numerous properties within my price range and knowing that I would have very limited choices I still turned them down, prolonging my stay at my parents.  But I knew, just knew, that the property I dreamed/compromised about was out there and would have my name on it.  It did and I’ve been living in it for 18 months.

But today, Oh My Goodness, today I was browsing the internet looking for larger properties to rent in my area.  Much as I love where I am you can barely swing a cat in the flat and it’s getting too cramped.  So I entered the search parameters and right at the top of my rental budget is an apartment (not a flat but an apartment – that’s how posh it is!) in the very street I dreamed of living in as a teenager.  It takes over the entire floor of an old Victorian ‘gentleman’s residence’!  I almost hyperventilated when I saw it!  And as if that wasn’t enough, it’s right next door to the house I want to buy (only £1.5m you understand – I’ve told my partner “Next year Rodney, we’ll be millionaires”!)

I couldn’t get on the phone quickly enough to arrange a viewing of the apartment but the earliest I can get to see it is Monday.  There are 3 other viewings of it before that but they can’t squeeze me in until then.  My disappointment was palpable and the Other Half has told me not to build my hopes up but I can’t help being a Daydream Believer (yes, I grew up listening to The Monkees).  He pointed out that it doesn’t have a garden which I so desperately miss but until I get to see the property I won’t know if it’s right.

I’m going to spend the rest of this week and the weekend being a Daydream Believer, after all, stranger things have happened.  And I’m asking the Universe to deliver.  I have Faith that If it’s meant to be, it will be.

And when you’re going through bankruptcy or you’re somewhere along The Bankrupt’s Route to Recovery you’ve still got to have your daydreams to keep you going.

What are you your daydreams?