The Children Factor
This month (May) my granddaughter will be starting school. It is a nervous time for her as she contemplates the loss of her friends and the environment at her day care but making new friends and a more structured learning environment. It is a nervous time for her parents as well, as they consider the costs of a child starting at a school. These costs can be quite steep with uniforms, stationery, transport etc and I am glad that my daughter-in-law has already approached the school to see if she is able to make instalment payments to lessen the impact of these start-up costs on their family income.
Like most grandparents I relish the opportunity to spoil my grandchildren and leave most of the disciplining to their parents. That’s only fair, because I didn’t like it when my parents told me how to discipline my own kids. However this shouldn’t be an excuse to not help with installing a disciplined approach to money within our young children. In episode five of Michael Latta’s “Mind over Money” documentary series he looked at how we teach our children the real value of money, and even for me it was quite an eye opener. He showed that a child saving $10 a week in a compounding interest earning bank account would only need to save until they were 20 years old to have a savings account balance close to half a million dollars by the time they were 75 years old. He pointed out that all the research showed that children who were disciplined with money actually did much better financially as adults. It wasn’t rocket science but very practical and common sense. Probably everyone who watched that documentary probably thought to themselves “well that’s pretty obvious” but how many of us still do the wrong thing.
Another thing that we should all be aware of is that our children are constantly being bombarded with kid specific advertising on TV, internet, magazines and in-store. It’s kid specific because it’s not aimed at the adult who ends up paying for a toy but at the child who will ask, plead and even demand their parent buy it for them. On the down side young children struggle with the concept of living within a budget but thankfully their concentration span is relatively short. One trick I have seen used is taking a photo of the desired toy or item on your cell phone telling the child that they might get it for their next birthday or Christmas. Usually the child has moved on to other interests and toys, by the time that day has arrived. If I take my grandchildren shopping I take them to second hand stores where the toys are cheap and they aren’t being bombarded with advertising.
Children are one of the greatest treasures of any society and although they can be exacerbating and demanding they are also loving and fun and it’s important to always consider their impact on your household budget.
- Pakanui Tuhura (Manager – Rotorua Budget Advisory Service Inc)