Financial Lessons for Your Children While On The Way to School

This is an imaginative, what-if post. We don’t have child to drop at school. But what if you have a child and want to, for a change,  impart some early/basic financial lessons in your child? What would you do? What other parents do? Let’s see what I came up on this aspect.

Car conversations are enjoyable. That may not be a common thing but car conversations are a great accompaniment to driving.

Given that – depending on where you are in the world – the amount of time you spend in your car daily may add up to more than 10% of a day’s hours, it makes sense to conclude that some of the quality daily conversations could and should take place in cars.

It’s great fun chatting with your children when sending them to school. The anxiety (dread or boredom, depending on your child) of having to go to school makes great stimulus for interesting and unexpectedly insightful exchanges with your child. It being a daily routine also makes it a useful – though underrated – parenting opportunity.

The thing about car conversations is that they are informal. That is something that will always put children at ease. This is a great tactic for easing in difficult parental conversation topics. Having said that, bear in mind that it may not be the most comfortable location too. Parenting conversational techniques notwithstanding, speaking casually about a serious topic doesn’t render the topic less serious but instead renders it more accessible and approachable.

While your child isn’t consciously aware of this effect, they often react and respond to it proactively – they take cues from these conversations to build up their opinions and impressions on their parents. Things may seem inconsequential, but to a child forming his/her personality and character this is one of the fastest live learning methods and experiences.

A lot of parents seem to think that the key to effective and productive conversations with their children is the topic. That is a very restrictive and to a certain extent disrespectful notion. Children are impressionable and are often opinionated. The key is how to bring it out of them and grant them the confidence to express it.

Knowing this, it is worthwhile to reflect on how to utilize car conversations when sending children to school to talk about finances with a child.

Money is something that children would naturally take for granted given their age and maturity. It is important that a parent is able to shape and mould a child’s understanding about money over the course of the child’s growth so that his/her understanding about money and the world matures alongside his/her intelligence. Plus the fact that it happens early in the morning means that the child may reinforce his/her understanding of the conversation at school.

There are a few angles that parents can use to do this – allowance, chores, soliciting feedback on a family expenditure.

ALLOWANCE

Allowance is an easy entry point and first-touch point to talk about money and finances. Depending on where you are in the world, you may belong to parents who prefer giving daily allowances as opposed to weekly or even monthly allowances. There are two aspects of allowances that can give you an angle to talk about finances – schedule and amount.  They are further elaborated below:

• Regarding schedule, explain to your child why you stagger his/her allowances.
• This helps teaches cash flow while helping your own cash flow too.
• Focus on discussing the child’s allowance usage so that you get a context on his/her spending patterns and tendencies. From that point have consistent yet intermittent probing conversations to encourage them to justify their spending by initially supporting their purchases before slowly developing an inquisitive attitude.
• Always ask the child what he/she wants and negotiate with them. This will impart decision-making and understanding of value and worth as the base, before they slowly develop that understanding into effective and efficient cash flow practices.
• Re amount, make it a habit to explain to your child why you feel they deserve the amount that you handed out. Justify yourself by utilizing their spending patterns and ask them if they think it’s fair. Encourage them to express why they think it isn’t (if they think so) and start negotiating.
• Be flexible when negotiating so you give the impression that while you are firm, you are also open to feedbacks and suggestions. This may also make them feel as if they’ve persuaded you themselves, which is great for building confidence and self-esteem and getting their buy-in. This way you’ve already made it easier for yourself when you need to explain some unexpected drastic cuts if need be.

The conversations on the above points can take place at any opportune time during the drive to school. Leverage on your allowance schedule for approach.

• If you give out daily allowances, always have a quick conversation before you drop your child to ask him/her how did they spend the previous day’s allowance and whether they had need any extra money.
• If you give out weekly allowances, make it a habit to ask your child in midweek and on Friday if how their allowances are holding up. If you give out monthly allowances, make sure you check back with your child every week.

In between these conversations, make sure you make it a habit to go back to a certain expense your child has made (buying a CD for example) and check on their opinion of their purchase – whether it was worth the money or not. This way they will realize that you are concerned not just for their financial well-being, but also you have an interest in their interests and how they express or find themselves through it.

CHORES

Chores are a very useful and handy parenting tool. It serves a few different purposes in one go – responsibility and character development, housework and also resource and time management. It is highly efficient and effective.

Many parents leverage on chores to justify giving extra allowances to their children should the need arises to teach them the value of money. It has been empirically proven effective.

• Similar to allowances, utilize the car conversations to raise or remind your child about their chores and let them dictate the course of the conversation.
• As soon as money comes in to the discussion, be open about it but also be firm during your negotiations.
• The key to successful negotiations is if you’ve obtained enough information regarding your child’s spending habits and leverage on that.
• Always offer your child the possibility to do chores to earn extra income during the drive to school as a carrot for him/her to be enticed with.
• Relate it to any allowances conversations you may have as it complements that.

SOLICITING FEEDBACK ON FAMILY EXPENDITURE

While this isn’t as commonly practiced as the above two angles, in essence it is similar despite not directly affecting your child.

It takes a more open and bold parent to solicit feedback and opinions on a family expenditure from their child. However, the intangibles of this practice do yield great results over a longer period of time.

• A child will feel as if he/she is part of the family decision-making and this helps their maturation into adulthood. Furthermore it supplies context for the child to understand some financial decisions that may have affected their own pockets.
• A bonus would be the child become more willing to accept anything decisions that affects his/her own finances and volunteer to help the family in any small way to ease the relative burden.
• Aside from the above, parents should also be more aware of their immediate surroundings along the way to school.
• Be sharp and observant to spot possible entrepreneurial examples along the way and use it as a conversation topic.
• Encourage questioning and light debates to stimulate your child’s thinking. If you’re bold enough and your child is old enough, offer or challenge them to look for some part-time work that offers some form of income so that they can slowly open themselves to your roles in their life.
• Sharing stories of local businesses run by familiar or well-known folk in the community is also a great conversation topic.
• Alternate your driving routes from time to time to take your child through different parts of town so that he/she can see examples of how people work hard on their own for their own income.

The key in all this is attitude.

Parents must be willing to concede that their child may not conform to their own adult ideals and principles and values. When the child sees that the parents think out loud and engage them, the child will feel that such attitude, approach or thought process is part of growing up. They will pick this up naturally.

Another key thing is opportunity. Adults must learn to be aware of their surroundings and affect the surroundings so that it will be a trigger for them to raise the topics of money and finances to their children in different ways.

As mentioned before, this is probably the first meaningful conversation your child will have for the day. If you get it right, the child will reinforce his/her understanding throughout the day and reward you handsomely in the future.

For all you know, one day it’ll be them who will be starting the conversations and driving it. When that happens, you’ll know that you’ve done it right.