One of the most important reasons to educate children about finances is to help them understand the value of money. When children realize that money is earned through hard work and saving, they become more conscious of their spending habits. They learn to differentiate between needs and wants, enabling them to make better financial decisions in the future.
The saying, “Parents are the Seed, Children are the Fruit,” clearly illustrates the connection between a parent’s actions and their child’s development. When parents “plant negative seeds,” such as squandering money, it can impact their children in various ways.
When children witness their parents’ wasteful spending, they tend to emulate this behavior. They may perceive that spending money without consideration is normal, leading them to not appreciate the value of money. This can create a vicious cycle where children continue to act like their parents without understanding financial management.
Children raised in an environment where parents lack savings habits or financial planning skills may lack the necessary skills to manage their personal finances. If children are not taught about the value of saving, budgeting, and sensible spending, they may struggle with financial management as adults.
At the same time, children may develop a mindset that links consumption with happiness. This can lead to dissatisfaction when they cannot purchase what they want, creating a sense of deprivation and resentment. Regarding this issue, psychologist Nguyen Ngoc Vui offers some helpful advice.
What are the implications of the saying, “Parents are the Seed, Children are the Fruit,” when it comes to parents’ negative financial habits, such as squandering money?
This saying implies that parents’ negative financial habits will impact their children in multiple aspects.
Financially, if parents squander money and do not practice prudent financial management, it will affect the allocation of funds for education, nutrition, and experiential opportunities for their children.
Even in cases where parents are extremely wealthy, and children are not directly affected by financial constraints, there can still be negative consequences. For instance, children may not learn to value money, develop a tendency to spend lavishly to impress others, or form a habit of judging people based on their external possessions. Over time, they may struggle to balance their income and expenses.
Are children likely to be trapped in a cycle of wasteful spending if they grow up in an environment where their parents do not manage finances well?
While there is no specific research to prove this, observations from reality suggest that children are likely to be influenced by their family environment and may indeed become trapped in a cycle of wasteful spending.
According to Pandora’s theory (the theory of learning through observation), when children grow up in an environment where their parents do not manage finances effectively, they lack positive role models for learning appropriate financial management. As a result, they may internalize and accept this behavior as the norm.
What methods can be used to help children understand financial management and personal responsibility as they grow up?
Firstly, parents should teach children about the meaning and value of money in life, as the line between wasteful and balanced spending, or between stinginess and prudence, is very thin. In some cases, these boundaries may shift and require adaptability.
Next, depending on the situation, the child’s age, and their personality, parents can help children learn to make their own decisions and plans regarding spending and financial management.
For example, at what age should parents start giving their children an allowance? When should parents involve their children in family financial discussions? These steps help children gain early exposure to money and financial goals. Parents can also discuss sensible spending habits and help children understand that saving for larger goals is a wise choice.
As children get older, particularly during their teenage years, family financial discussions become even more important. Parents can talk about significant financial decisions, such as purchases, investments, or long-term savings goals. This gives children a realistic view of financial management and helps them understand that every decision has consequences.
How can parents turn their negative money habits into positive lessons for their children?
In reality, the most valuable lessons come from failure. While parents can teach children about money, this knowledge remains theoretical until children experience it for themselves.
So, teach children about spending and financial management in their daily lives. For instance, give your child VND 200,000 to spend for the day.
Initially, without guidance, they may spend it all on snacks and toys. If they complain about running out of money quickly, seize the opportunity to teach them about the consequences of inappropriate spending and how to say “No” to themselves when necessary.
If they grow up without learning to manage larger sums of money effectively, they may unintentionally create further financial difficulties for themselves in the future.
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