This article will help your kids to understand the difference between needs and want.
My children (both below 10 years old) have been appealing that they needed internet enabled phones for a while now. It has been very funny to me and each time they talk about it I have used the opportunity to help them understand the difference between needs and wants. One of the times they spoke about it, I explained as usual that it is a want and not a need and that money isn’t available for that yet. He went further to say, “Can’t you just go to the ATM machine to get the money?”.
It is interesting to note that most children have a lot more respect for their own money than they have for yours. In other words, that toy, gadget or whatever it is they really want might be something they have to have if it’s your money but they might be able to live without it if it involves their money. Even if kids are expected to contribute a small amount of money towards a purchase, they may be able to decide they don’t really need the item.
Little kids know you get money from either your wallet or the ATM machine, but they may not understand that the money has to be earned first. At this point you need to explain that most adults get a job so they can earn money, called income. Sometimes people get paid a certain amount of money for each hour they work (wage), and other times they earn a set amount of money (salary) no matter how many hours they work. Different skills are needed for each job, and often people choose a job (short-term employment) or a career (long-term employment) based on their interests and skills. Also let them know that some people go to extra school when they are older to learn certain skills while other people learn skills through experience.
As a parent it will be good to explain what your job is and how you are paid. An exact detail of how much money you make isn’t necessary at this point. You might say, for example, “I work as an accountant in a Company. I earn a particular amount of money that has been pre-agreed by my employer and myself every month and this is paid at the end of the month. Our family uses the money in addition to what your dad makes to buy the things we need and some of the things we want. We also give to those who are in need and save some money so we can use it later.”
If you are not into business you can also use the opportunity to explain that some adults (and even teenagers) use their special talents to start their own businesses. Let them know that people who start their own businesses are called entrepreneurs. Entrepreneurs are their own bosses and have to make lots of important decisions, and you may not earn the same amount of money each day, week or month. There are different types of entrepreneurs, ranging from people who sell different items to those who offer professional services.
As soon as children are able to understand that people have to earn money, they might be interested in learning how they, too, can earn money – right now and in the future. For now, you can discuss an allowance, or doing specific jobs around the house to earn a little bit of money. Often, kids get money for birthdays and other form of gifts. It is exciting for children to discover all the ways they can make money. You can support your child’s entrepreneurial spirit by discussing any ideas he or she may have for a small business and encouraging creativity. If your child is thinking of starting a business, don’t do all the work; only help him or her by providing direction and suggestions along the way to make it a valuable learning experience.
Most kids like to talk about what job they would like when they grow up. Point out that they don’t have to make a decision just yet, and get them thinking by asking questions such as:
• What are your favorite subjects in school?
• Why do you like those subjects?
• Can you think of any jobs that might relate to those subjects?
• What are your favorite hobbies?
• Can you think of any ways to turn a hobby into a job?
• What careers do you admire and wish you can start working towards?
While it may be exciting to hear that your child wants to become a doctor or an engineer, it’s important to maintain interest and enthusiasm for any idea they have – even if their dream job sounds terrible or ridiculous to you. Keep in mind, a lot will change between now and when the time comes to settle on a career path. It is helpful at this point to allow kids to freely explore different ideas for careers, and rather than make any judgments about a particular interest, you can discuss what it would be like to have that job. A careless, “You don’t want to do that. Do you know how many years of school that would take?” or “That’s a bad idea. You’ll never make any money” can be enough to crush a child’s confidence and creativity. Listen, discuss and allow them to draw their own conclusions. Your reaction can have a lasting impression.
Gbonjubola Sanni – she is a Public Speaker and Conference teacher who is passionate about women’s interests, a financial literacy advocate for children who has authored two books on financial literacy for kids. Director of Eadda Kids Enterprises.
skype: gbonjute