With our favorite TV shows on demand with Netflix and car rides with Uber just a tap away on our phone, it’s no secret we live in an instant gratification society.
So, how are we supposed to teach our children, who are growing up with entertainment and services on demand, how to enjoy the journey along the way to the destination?
Delayed gratification is the key to financial success as an adult, and parents can start helping their children find the joy in saving and investing now to reap the rewards later in life.
Since children form most of their financial behaviors by age 7, according to the University of Cambridge, it’s imperative parents begin ingraining this mindset in their children from a young age. However, in a world where instant gratification is a regular part of their daily lives, how do we teach our kids to enjoy the process?
Here are some of my favorite and most effective ways to teach children how to enjoy the journey to financial success.
Finding everyday examples
Since children are visual learners, I love finding everyday ways to help my children understand important financial lessons.
For example, every year around St. Patrick’s Day, my children plant sugar snap peas in our backyard. This plant grows relatively fast, taking roughly 120 days to mature. Not only is it a fun activity for children, but gardening metaphors are always a great way to teach children financial lessons.
Along the way, my kids will get excited when they see the peas growing, or the flowers on the plants blossoming. Not only will children enjoy the little moments, but this also serves as a dual financial lesson, as they’re also saving money by growing their own food.
As my children grow, I’ll be able to turn this into a more robust financial lesson and explain how the process of growing the sugar snap peas is like building a 401(k). Though you’re only putting in a little bit at a time, the end result is rewarding.
Teaching small choices matter
Small, seemingly insignificant decisions don’t always appear to have an impact on the long-term. However, what many kids fail to realize is how small decisions can lead to major results.
One question I often ask with my clients is this: If you had a choice, would you choose a million dollars in one month, or a penny that doubles in value every day for 30 days? (Hint: You want the latter.)
Though most people will pick the first choice, the alternative would actually accumulate a larger amount of money. Nevertheless, most people won’t pick the second choice because they aren’t willing to wait for results. WE live in a society where we want everything immediately.
For parents of younger children, I highly recommend reading Curious George Saves His Pennies to them. This story focuses on Curious George saving up his money to buy a special red train at the store. Throughout the book, he learns that sometimes it takes more time more work than you may initially believe to reach your goals.
Leveraging the order of money
Most importantly, when teaching our children to enjoy the journey, it’s also important we tie this back into the order of money. As I mention in many of my lessons, instilling this in our children from a young age will help to ensure their future financial success.
Another great example is the story of my daughter, Cora, raising money to buy her first bike helmet. To help her achieve this goal, my wife and I helped Cora set up her own lemonade stand. As she raised money, being able to visualize her savings helped Cora to understand where she was at in her journey.
Still, it’s important for parents to understand when their children are raising money for a specific purchase, they shouldn’t be placing it in their “save” slot of their piggy bank, as you don’t save to spend, you save to save. So, any money raised for a particular goal or purchase should be placed into the spend slot of the piggy bank. It’s important we teach children if you want to spend something, you’ll have to work harder for it.
Understanding the “why”
Moreover, whenever we teach our children a lesson, it’s important we communicate the “why” behind it.
For example, with the sugar snap peas activity, it took patience to look at the peas, recognize they weren’t quite ripe, and not get discouraged. Instead, they learned that some things take time. The same can be said about your children’s “spend” slot in their piggy bank, and they can easily get discouraged when it takes a while to accumulate the amount needed for a purchase. However, learning to have patience for something important is an invaluable lesson to learn at a younger age.
As your children develop into fiscally responsible adults, they will be able to lean back on these lessons and not be inclined to “cut down the pea shoots.” Meaning, as they begin investing, they won’t get discouraged with the small amounts, knowing one day they’ll grow. Teach the concept that you shouldn’t cut down something small, as it will one day multiply.
To learn more about what financial lessons you should be teaching your children, please click here to contact me to learn more about my complimentary workshop, Raising Financially Fit Families, which I present to groups and organizations of all sizes.
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