Invest time to teach kids finances
Published 9:09 pm Thursday, June 22, 2017
By Nathan Rice
The Harlem Globetrotters were finishing the first half of their game when they picked a young man from the audience to join them on the court.
Using a small basketball, the Globetrotters made it spin on the boy’s finger. Then, as time was running down, a Globetrotter helped the boy aim for the basket and shoot the ball. The ball made a swishing sound as the clock expired.
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The crowd cheered, and the young man returned to his seat happily gripping the Globetrotters’ trademarked basketball. The announcer introduced halftime, making sure to tell everyone they could get their own Globetrotters’ basketballs at the merchandise table next to the court.
It was a brilliant marketing strategy.
Pairs of little eyes now stared up at me in hopeful anticipation. I explained that I could not afford to buy each of them a basketball. One of them was especially disappointed and continued to lobby for the basketball.
I again explained that I did not have the money, and we walked towards the concession stand for the previously promised halftime snacks. Suddenly, my arm was jerked back as two hands pulled me to a stop.
“Look!” she squealed with excitement. “An ATM! You can get MORE money!”
It would be nice if it worked this way.
But, even though we all know it does not, children may not yet have learned this lesson. Money, finances and the value of a dollar must be taught.
There are numerous ways to go about instilling this knowledge in younger children, and there have been volumes of books and countless articles written to help in this endeavor. These resources can be helpful, but they can also be overwhelming. It’s hard to know where to start.
You can begin helping children understand the value of money by using terms they understand. The dollar amount of an item they desire may not have a lot of meaning to them. An explanation of what it takes to earn or receive that much money may provide context.
For example: “This toy equals three weeks of your allowance.” If children are earning money through chores or small jobs, you can explain how much work they would have to do to have enough for the thing they wish to purchase.
“You would have to complete five chores to earn enough to get this toy. Is this toy worth all the work that you did to get that money?”
This replaces the dollar value of an item, which can often mean very little to children, with a more tangible value of time or work.
Next, help children separate their money into different categories. Label one piggy bank for spending, another for savings and one for charity or church. Then be sure to provide their allowance or earnings in a way that can be easily split into these different banks and help them understand the reason of splitting up their money.
“Let’s put your first dollar in the church bank to take to the church on Sunday, because we always want to give God our best. Next, let’s put two dollars in your spending bank. You can use that this week when we go to the store. Now let’s put three dollars in your savings bank, because you want that new toy, and if you save this much money for 10 weeks you’ll have enough.”
Whatever categories you create with your child, make sure they understand the reason behind each one.
These simple steps can serve as building blocks to help your children understand money, finances and budgeting. You can also build upon it as children grow and learn.
You don’t have to be a financial expert; you just have to be a loving parent willing to introduce some basic principles that can help them for a lifetime.
Nathan Rice is the Relationship Manager of the Downtown Suffolk branch of ABNB Federal Credit Union. He is a Hampton Roads native and can be reached at firstname.lastname@example.org.