Teach kids values and the world is their oyster

On the money: My son and I are creating our very own adventure book. A sort of scrapbook where we're writing down where we want to travel to, sticking in photographs of the places, including maps, writing bits of information - and a target date.
Gary Clement for The National
Gary Clement for The National
My son and I are creating our very own adventure book. A sort of scrapbook where we're writing down where we want to travel to, sticking in photographs of the places, including maps, writing bits of information - and a target date. I love that my little one is very keen on exploring new countries and the big outdoors, so what better way to get him to think about money, and be actively involved in decision-making, as well as plan for the future?

He already knows that we have to save money to pay for these excursions, and that he needs to think about what he wants versus what he needs; when he says he wants a toy (gifts are generally limited to special occasions), we have a chat about whether he'd rather have the toy, or his much awaited trip to Sri Lanka early next year - so far he's chosen the trip every time.

In fact, he's taken it to another level: just last week, on the back of buying much-needed socks and shoes, he suddenly asked, on the way to the car, whether the money we'd just spent meant less money for Sri Lanka. How wonderful. It means that he's processing information, and is figuring out how decision-making and spending habits affect what we can do with our lives.

We had a discussion about how there are some things that we need to spend money on, and yes it means less money for the holiday fund, but that it's fine, and that it's the other stuff that we need to look at, the stuff we don't really need, and sure, sometimes we want to give ourselves a treat - and that's fine too. All very complicated really - I know many adults who are struggling with these concepts and decisions.

Who wouldn't want to truly provide for their child and make them happy? The way we go about this, and what our behaviour translates into in terms of how our children view, feel about and use money is the really important thing. Why? Because this will become their blueprint for money and life - at least for their first few decades.

I'm increasingly concerned about how parents believe they are setting their children up for life by leaving them money. There are even policies out there that can create immense wealth - millions of dollars - upon the death of the parent. Put simply, these are life insurance policies where the payout can be in the tens, if not hundreds, of millions of dollars. Sounds like an amazing gift to leave your children doesn't it?

I believe one of the biggest gifts we can give our children is the ability to manage their money, and for them to have a great, positive emotional relationship with it.

This needs to include their view on life, and honouring their decisions, decisions that they'd ideally arrive at after knowing, and understanding, in their own special way, the facts and the consequences.

You see, we cannot truly ensure that our children will not lack for anything financially, even if we take out a life policy that leaves them with millions. Let us not forget the ongoing ramifications of the credit crunch where people and families have lost everything, or situations where a sudden onset of debilitating illness or death changes dreams and plans overnight.

And even if you did manage to leave your progeny with a bundle of cash, what's to say they won't fritter it away? The media is full of stories of sporting heroes, pop stars and lottery winners who, having scooped up millions, are destitute because of reckless spending, mismanagement of money, or bad decisions.

We cannot guarantee how long we will remain fit and healthy, or how much time we have on the planet. So instead of hoping for the best, get real and plan for the worst, and give your child the gift of respecting money and learning how to best use it.

My son is six, and so far we have Antarctica, Madagascar, Sri Lanka and an annual ski holiday in our adventure book. I hope we get to experience these places, and many more, together. But even if all our planned adventures don't become reality, we'll have had a great journey on the way, secure in the knowledge that he'll be in an excellent position to embark on whatever life experience he puts his mind to.

Nima Abu Wardeh is the founder of the personal finance website www.cashy.me. You can contact her at nima@cashy.me

Published: May 18, 2013 04:00 AM

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