5 Money Habits To Avoid Telling Your Kids

Shasha’s eyes grew large in amazement when she saw the soft curly braids, the beautiful silk sparkly dress, the lovely red bricked castle of her dream toy. Princess Barbie in her very own castle. She looked at her mom, feeling determined, she says in a very loud voice, making everyone in the store turn and look, “Mom, I want that Barbie! Can you buy me that?”

Lenny, her mom, looked at Shasha, pulled her on the side and whisper to her child, “We don’t have money for that! Stop it.” Shasha, without another word, began to cry.   The loudest cry Lenny has ever heard.

What would you do if you are Shasha’s Mom?

Given how important financial skills are for life, it is surprising that our present curriculum in schools doesn’t teach children anything about money.

As a parent, however, you want to teach your child these important money lessons. But, growing in a society that do not teach anything about money skills. Parents themselves acquired bad money habits that they repeatedly pass on to their kids.

Let me give you things you should not say or do with your child about money:

1. Don’t tell your kids: “Wala tayong Pera Anak” or “We don’t have money”

Whether it is true or not, you have to stop doing that to your kids.

Kids are like sponges, they take in everything they can. They learn so much when they are still young. If you keep telling them, “We don’t have money” and they keep absorbing that. They will grow up telling themselves, “We don’t have money! (Wala kaming pera)” over and over again in their heads. What would that do with their minds? It could limit their minds to be creative enough to invent ways on how to achieve something he/she really wants.

Instead, say this:

If your child wants something, and you don’t really have the money, just tell:

• Honey, we can afford that, but we rather not because we are saving it for your school next year.
• We can buy that, but not right now. But you have to help save me if you really want that.

By answering those instead of telling you don’t have money, you are actually:

• Teaching your child – the virtue of “Delayed gratification,” that he has to wait for something he wants and learn to save for it
• You are also building in his mind a “wealthy mindset” instead of the “poor mindset,” You are teaching your child to spend wisely even if you have money to spend.
• It also has an advantage for you, as a parent, since, your answer becomes open ended, it will also help you as a parent to create ways on how to expand your means in order provide more. Telling your kids you don’t have money, ended the conversation, it also ended the dream that you cannot do anything about it anymore.

2. Don’t pay your kids in exchange for doing a Household chore

Although the intention is good, which is to teach household chores to your kids. Whether you like it or not, you are setting your kids’ minds to an “Employee mindset” by paying them for each chore done.

It’s a perfect example of a boss that pays an employee to do something for him. The child will grow up, knowing that it’s the way the world would be in the future.

I believe household chores are also important for your kids to learn. But they are not something they should be paid for doing it.    Don’t tie regular chores to their allowance, says Beth Kobliner, author of Make Your Kid a Money Genius. You want to make your child understand that being part of a family requires doing some tasks for which they will not be compensated, like, keeping his room clean or setting up the table.

But, if you really want to give them money, you can reward them for the EXTRA effort only. You can give a bonus for doing jobs beyond expectations. This instills the critical linkage between Work and Money, says Bill Dwight, founder of online family banking.

3. Don’t tell your kids to study hard to be able to get a good paying job in the future

Allow me to tell you what a Chinese businessmen tell to their kids when they are growing up:

  “Lee, my son, study hard so that when you grow up, you can help me take care of our business or you can set up your own business.”

Traditional Filipino Family:

  “Pedro, study hard so that when you grow up, you can get a high paying job and help us.”

  In Tagalog, “Anak, galingan mo sa school, mag-aral ng mabuti para paglaki mo, makakuha ng magandang trabaho yung may malaking sweldo, at para matulungan mo na kami.”

Sounds familiar? Have you heard something like that from your parents? Have you heard it over and over again in Teleseryes?

What is the difference?

Lee was set up to have an “Entrepreneur mindset. That he will soon help with the family business or set up his own business and create jobs for people like Pedro. Because Pedro grew up in the environment of an “Employee mindset.” That he has to study hard to get a job and earn. The parents did not tell him that there is another option, that he can build his own business and be his own boss.

4. Don’t always have ‘pasalubong’ for them every time you go out

This might be very hard for a Filipino family. But as a parent myself, when I go out, and my child is already awake and clung on my skirt and would not let me go. As a Filipino parent, I admit, I also fall into the easy way out, “Anong gusto mong pasalubong?” “What treat do you like when I go home?

Yes, this may be the easiest way out if you want to go, but this might instill a deeper understanding to the child, that you always have to bring pasalubong every time.

In an article, “Why buying ‘pasalubong’ too often isn’t a good idea,” Salve Duplito warned, those candies, cupcakes and toys can add up to thousands of pesos per year that could have been saved and invested for the child’s future.

In addition, the child would be excited to see you not because of your presence, but because you have a ‘pasalubong.’

Parents don’t have to completely stop buying pasalubong for their kids. They can reduce the amount of treats and set rules on what and when to buy.

5. Refrain from always buying something for them if you are all in a store.

Set the ground rules before you enter the mall/store by telling:

Michael, we’re going to a toy store to buy Zander a present. You can look around. You can tell me what you want, but we are not buying you anything. Today is for Zander. Do you understand?

Don’t be surprised if your child protests, or still come up to you with a toy in hand and even negotiates that if you get him today, he will never ask for anything again.

Your response should be directed to your ground rules. From the original conversation you had with him before you enter the store. If you give in, you’ll be in big trouble.   Your kids won’t believe you the next time.

If you really want to buy something for them. Set the rules also before you enter the store/mall that they are only entitled to only one (1) toy/item and not more than that.

If your child is a little bigger. You can give him the money to buy what he wants. Let’s say, you give him 100-300 pesos for any item he wants that will fit in his budget. But, there is a bonus, if he chooses not to spend it, and save it instead, he will receive 50% more of the amount you gave.   For example, you gave 100 pesos, if he chooses to save it, he will get additional 50 pesos from you.

This exercise will teach them life skills, like:

• Budgeting
• Comparing prices
• Importance of delayed gratification
• You are actually teaching “Compound Interest” which is choosing between:

Spending and enjoying NOW, or Saving now for MORE rewards later.

Money skills are as important as instilling values to your child. It is an important life skill that everyone should have. Teaching it the soonest you can will be a big advantage to your growing up child as he becomes an adult. We are our child’s first teacher and teaching about managing finances should always be part of our curriculum starting at age 2.

In the next post of this series, I will be teaching you activities in your daily lives that can help you teach your child about finances, I call it, “teachable moments.” So, watch out. You might as well subscribe here for free, so you won’t miss it.

Remembering the rules they talked about before entering the room, Lenny, caught herself and thought of a better strategy in dealing with Shasha’s tantrums. She looked at Shasha, took a deep breath and said, “Shasha, remember, that today, we are going to buy a birthday gift to your friend Liza?” How could you be able to attend the birthday party without a gift for Liza? Do you want to attend without a gift? Suddenly Shasha, remembering the party the next day, she stopped crying and said, “Ok. But will we buy it next time?” Lenny says, “Well, yes, but you are the one that will be paying for it! Shasha gave a puzzled look and forgot all about the Barbie. Lenny proceeded in explaining….

Watch out for another part of this series: “Teaching Your Kids to have an Entrepreneur Mind Set”

Helping you teach your little ones,

Few more supplements for your Financial Health:

• How to get more than 50% discount for your child’s College Tuition fee
• How to save more than 50,000 Pesos by just bringing your child to a Pediatric Dentist
• How to Save 78,000 Pesos Just by Breastfeeding your Child
• 10 Signs You are a Money Smart Mom
• The Top 10 Life Insurance Companies in the Philippines The Most Updated and Most Unbiased Review 2014

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Pinky De Leon-Intal, MD, RFC

Doc Pinky is a licensed Medical Physician, Internationally Registered Financial Consultant, Certified Investment Solicitor and Associate Wealth Planner and Estate Planner of the Philippines. She loves to educate and spread financial literacy. She is a Lactation Consultant. She loves to travel. She is a devoted wife and mother.

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