Holidays – A Time for Financial Learning

A challenging but appropriate time to learn financial decision-making!

Any holiday is an important time for children to learn about the value of money.

At this time, the parent influence is greatest because children are home with their parents for an extended period of time.

Do parents realise the potential impact of what they are saying and what they are demonstrating when it comes to the use of money?

Imagine this...

A parent heads off to the local centre to do some holiday Christmas shopping with a child. The child who could be aged anywhere between four and eighteen, will be watching the parent make financial decisions to purchase certain items and listening to the parent as he or she interacts with a sales person.

Throughout this process, the parent exhibits certain values and beliefs about the use of money during that experience. The child sees the parent’s behaviour as the expectation, the norm, and the way to do things when shopping. This is especially the case when this pattern of behaviour is repeated every time the child accompanies the parent shopping.

What beliefs and values are being presented by the parent to the child? Here are two examples of how parent comments can vary in the same situation.

What values and beliefs are being shared with a child if these comments are consistently representative?

Parent A 

Parent B 

“This jacket is what I want. I will buy it now.” “That is what I want. I will buy it. I will see if this is the best price and check the warranty details first.”
“Your sister would like some skates for Xmas. Come with me to choose the colour.” “Your sister would like some skates for Xmas. Let’s find out about the different types of skates and their features. I need to find skates that are right for her ability. Can you help me?”
“I can only spend $50 on a gift for Sam. What does Sam want?” “I can only spend $50 on a gift for Sam. What does Sam need?”
“We will buy the cheapest wrapping paper because it will get torn when you open the presents.” “We will buy the cheapest wrapping paper but we can still reuse it if we take care opening the presents.”
“I am in a hurry. We need to shop as quickly as possible so I can watch my show on television.” “I am in a hurry but we must shop carefully. I will come back tomorrow if necessary.”
“I will put it on the credit card and hopefully pay it off over the next few months.” “I will use the credit card and will pay it off this month.”
“I have had a bad day. I need some ‘retail therapy’. Do you want to come with me to the shops?” “I have had a bad day. It is not a good day to go shopping. Let’s go tomorrow.”
“You asked for $30 to buy a gift for your brother. I will give it to you tomorrow after I go to the ATM.” “You asked for $30 to buy a gift for your brother. When you finish these few jobs I will give it to you. Everyone has to work for money.”
“The shirt is cheaper on this online store. I will order it now.” “The shirt is cheaper on this online store. I will order it after I check the stores location, reputation and returns policy.”

  
Clearly parent B is presenting to the child a set of beliefs and values that will encourage greater financial capability in the future. As parents, do we want our children to:

  • think about their use of money
  • think before they spend
  • understand the difference between needs and wants
  • make informed financial decisions
  • have a process for making financial decisions
  • take their time when making financial decisions
  • develop an understanding of debt and its implications
  • consider shopping as a form of ‘therapy’
  • appreciate the relationship between work and payment
  • carefully consider online transactions.

These are just a few examples of how as parents we educate our children unknowingly. It can be a frightening realisation. Yet, this is Financial Literacy 101. It is these basic messages, more than any school curricula that reinforce and teach children to be financially capable. As parents, we carry this responsibility.

This is especially the scenario at Christmas when our children see us spending money in preparation for the big day, at the post-Christmas sales, while we may be on vacation together and generally while we are at home over the holiday period.

Teen onlineshop

Recently, the growth of online shopping has provided a convenience for parents who wish to purchase Xmas gifts or other items. The online world is of course the world in which our children are growing up. For many parents, there is an assumption that because our children have grown up in this world, they will have symbiotically learnt the skills to engage with that world safely. This is an extremely dangerous assumption. It is a wrong assumption.

Parents who are going to shop online should use this opportunity to demonstrate with their children the advantages and disadvantages of this process. Informed financial decision-making in the online environment must include quality research of not just the items to be purchased, but also price variances, return policies, warranties, store location and integrity, payment security and so on. Convenience is not the only factor to be considered.

Your children will have this online shopping opportunity in the home environment, where it is authentic. The school environment will not provide a ‘real’ situation. For this reason alone, parents must take responsibility for these ‘online’ lessons.

One of the challenges for parents is the fact that as children grow it is natural for them to test boundaries. Especially during the teenage years when their brains are developing rapidly, teenagers will want to test their physical limits and their relationships. This is natural, although it can be difficult for us parents to manage.

Teenagers test us in many ways e.g. requesting to stay up later, seeking more independence, challenging us to trust them, etc. This can also include testing us for financial limits. Have you ever heard similar comments?

“I need to get a new pair of shoes because my friend Amy has got lots of shoes.”

“Jim always has more money to spend on things than I do. Can I have more money when I go out?”

“Freddie gets to go everywhere and do lots of things. Why can’t I?

“Sally doesn’t have to work to get her pocket money.”

Responding to such questions can be difficult challenges for parents. Teenagers will always be comparing themselves with their peers. Access and use of money is one form of comparison which may become more acute during the holiday season. Once again, how we respond to such questions will reflect our values and beliefs with regard the use of money. Those values and beliefs will naturally flow to our children.

If we want our children to display appropriate habits with their use of money, we need to demonstrate this. If we want our children to become adults who make informed financial decisions, we need to demonstrate such behaviours in front of them. They will listen to us. They will watch us. They will follow us.

The holiday season is a great time to teach and demonstrate informed financial decision-making.
Happy holidays.

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