Your Money Blog: How to talk to your kids about money

The Dubai-based life and careers coach Zeta Yarwood gives her top tips for teaching children about money.

Zeta Yarwood. Victor Besa for The National
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The Dubai-based life and careers coach Zeta Yarwood gives her top tips for teaching children about money

Teach them what money really is

Money is not the goal, it does not make us happy and it is not the source of our self-worth. Money is simply a tool that helps us to achieve our life goals. If we don’t have enough money, we simply have to look at where we can earn more, spend less or extend the deadline for the life goal if necessary. Giving money any other meaning will lead to a life of pain and suffering.

Pay them for their efforts – not their results

Paying kids for their hard work and not their results helps to build a solid foundation for financial success on different levels. Some children are simply not going to get straight A’s. Telling them they’ll get Dh100 for every A they get sets of up for feeling of disappointment and failure, and children who get As with very little effort will not value the Dh100 at all. But if you can pay them for the amount of effort they put in, it primes their mind to value their time and money. This means they are more likely to have a healthier, more sensible approach to money in the future, as well as a better work ethic, adding to their potential for success later on.

Lead by example

If you want your children to have a healthy and sensible relationship with money, you have to too. Remember – your children are modelling your behaviours, attitudes and beliefs. Being reckless with money is an obvious problem and can lead to debt, stress and other issues later on. But also being scared of not having enough money and saving everything you earn is not healthy. It teaches children to constantly be living in a state of fear and stress, and can also send signals that we are not worth spending money on, and can lead to low self-worth. Both options can rob you of life.

Teach them the importance of saving and investment, and how

Society today is all about instant gratification and not delayed gratification. We’re living in a world where we can have anything we want in a matter of minutes – so why wait? Unfortunately, this is the mindset that results in some people being in serious amounts of debt – or having little financial security for the future.

Setting up a small investment or savings scheme at home can really help. Let’s say you give your children Dh100 a week. You could give them the option of either receiving them the whole amount, or giving them Dh80 now, and if they save the remaining Dh20, you will give them another Dh20 at the end of the year. Showing them how that could result in an extra Dh1,040, and getting them to think about and visualise what they will do with that money, can help get them into the mind-set of delayed gratification.

Teach them not compare to others

In the UAE we are surrounded by wealth, and people often compare themselves to others. This can then lead to feelings of failure, being unworthy or not good enough. It can also lead to a sudden desire to “keep up with the Joneses’” in fear of being judged. It’s this behaviour that lands many people in hot water financially. Teach children to be happy and grateful for what they have. Help them identify what is really important to them in life, and to chase those things and not money.

business@thenational.ae

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