Raising a financially intelligent child.
The importance of raising a financially intelligent child at this age cannot be underestimated. And because most parents were not built to be financially intelligent, they keep having financial challenges that affect them. I believe we can both agree that financial difficulties are draining, and if not correctly handled, it can strain the family.
This reason is why parents must teach their children to be financially intelligent. I know a friend who doesn’t know how to manage money. As soon as money comes, he spends it.
To help himself, he found someone to keep his money. But the funny thing about finding someone to help manage your finances is that if you are not careful, you can still squander the funds on irrelevancies.
My friend’s income is still low. Just imagine his plight when his income increases or if the person who manages his finances is a fraud? There is no short cut to financial independence but through FINANCIAL INTELLIGENCE.
The ability to make informed decisions and take actions that generate sustainable wealth is financial intelligence. From the definition, we see that business intelligence is both a decision and a work. Thus you must teach your child how to make decisions on money and put their choices to work.
There is no better time to teach your child financial intelligence than now. Why now? Well, the world is changing. Start-ups are on the increase. Millennials are so innovative that they make their first millions in their early 20s. I read a story of a young Millennial who made his first million at the age of 21, legitimately. But today, he is broke because he spent the money on a car and hang out with friends. Only if that boy was financially intelligent? He would have been able to invest that money in building something sustainable.
As a deliberate parent who wants to raise a balanced child, you must be intentional in teaching your child the principles of financial intelligence. I remember the book the ‘Richest Man in Babylon’ by George Clason. I read back in my university days; it was a game-changer for me. From that book, I discovered that the Babylonians were prosperous because they understand the principles of financial management.
So how do you teach your child financial intelligence? Let’s walk through it.
HOW TO TEACH YOUR CHILD FINANCIAL INTELLIGENCE
- Let your child own an account: I know you were thinking of a bank account well, I was thinking of something else. You can help your child set apart a percentage of his/her money in a piggy bank. Let your child own a piggy bank, and whenever he/she receives a gift, a portion should be saved. I know it is tempting to collect the money from your child with a promise to keep it safe. However, you are not helping your child. Let your child learn the principle of savings.
- Teach your child how to budget: the next time you need to do the shopping for the house, let your child watch you prepare the budget. This way, your child knows that shopping is done with proper planning.
- Set shopping examples: if you need to go shopping, take your child with you on that trip once a while. Let your child see how tempting it is to do impulsive shopping. It is okay to be tempted to buy things that are not on your list, but it takes discipline to stick to your list. Also, your child learns to avoid impulsive buying.
4. Teach your child to work: growing up, I wished and dreamt that money will grow on trees so I could buy everything I ever wanted. Thank God for growth! At least I know money does not grow on trees but comes from honest labor. You can help your child pay him/her to do chores around the house or run errands in your workplace or for your business.
5. Teach your child collaboration: Most adults don’t know the importance of financial collaboration. They don’t know because they were not taught to value cooperation. A cursory look at today’s influential companies will reveal they were built on financial collaboration. The next time you need to buy that toy, ask your child to contribute a quota from his/her savings. If you have more than one child and have been pestering you to buy them something, make them raise a part of the money amongst themselves.
- Raising a financially intelligent child Sometimes, make your child buy writing material using his/her own money. Today, we have young adults who don’t know how to buy books, courses, or even attend paid training that will foster their self-development because nobody taught them to invest in themselves. They often perceive such expenses as a waste of resources. But a person who values personal development will be able to create sustainable wealth.
- Teach your child to choose healthy foods over junks: I am adding this point as an afterthought. While health is often overlooked, it is highly essential. It is only a healthy body that can create wealth. A sick person cannot work, and it is only a person who values spending money on healthy food that will remain healthy.
So go on and raise a financially intelligent child. Remember that a financially intelligent child will manage his/her finances effectively, even when you are not there. I also like to add that you must observe your child and know where more considerable attention is needed in financial management.
You can also check out our article on raising an emotionally intelligent child if you enjoyed this article.