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You are here: Home / Investing / How NOT to Teach Your Children about Money (A Personal Experiment)

How NOT to Teach Your Children about Money (A Personal Experiment)

“Kavya, what is money?” I asked my twelve-year old daughter recently, as she was deeply engrossed in a book.

Her answer stumped me, simply because I was not expecting it and in the way she said it.

She said, “Papa, money is something that, if we don’t waste, can get us bigger and better things in the future.”

“Wow!” I told her. “You deserve a hug for this.”

How Kavya defined money may not be its perfect definition, but it effectively contains almost the entire essence of how we must handle it (money).

It contains the importance of saving money by spending less money now, and letting the power of compounding grow that money so that we can maintain our purchasing power (and still have more money) in the future.

I was especially amazed at her answer because the same child, till about a few years ago, thought that money came from the ATM, and that her father could get as much as she wanted to buy as many toys as she could set her eyes on. That’s what most kids think these days.

Anyways, since then, it hasn’t been an easy ride for me and my wife to get the right money ideas in her brain…but then who says parenting is easy?

My First-Hand Experience in Parenting
I don’t remember how many times I have told Kavya to change her clothes after coming from school, brush her teeth twice a day, do her homework before going to play, and do anything else for that matter.

It starts with “Please do this!” and ends with “This is the fifth and last time I’m telling you to do this!”

I am sure if you are a parent, this is also a normal part of your daily life.

As parents, we ask, and ask, and ask, and ask…and if we are lucky, our kids cooperate after the fourth or fifth request or after a loud but otherwise harmless scolding.

We complain that our kids never listen to us, and ask other parents how they get their kids to behave, eat healthy food, and go to sleep on time.

If that’s not all, we consult the Internet and several books on bringing up well-cultured and disciplined children.

Then, even as we apply all those techniques, our kids just don’t listen. But, they do observe.

Yes, that’s the way kids listen to parents – not to their words, but to their actions.

While I am yelling at Kavya, she is watching me. While I am arguing with my wife, she is watching us. While I speak out my mind at rash drivers or lose my patience during traffic jams, she is watching me. While I spend money, she is watching me.

Our kids are watching our every move, even when they don’t listen to one word, at least not till we say it for the fifth time.

Our Kids Also Watch Our Money Behaviour
I have been a parent for just the past twelve years, so whatever I am suggesting below is from my limited experience.

The truth I have realized is that, as parents, we shouldn’t worry that our children never listen to us. Instead, we should worry that they are always watching us.

When it comes to money, I have realized that whatever little Kavya has learned has been by watching me and my wife handle our money.

So I feel proud to know that, at a tender age of twelve, she knows the importance of…

  • Spending less than earning (she saves money every month out of her pocket money, which gets invested in her mutual fund account)
  • Not following the crowd (she is fine ‘not’ owning a mobile phone even as all her friends do)
  • Avoiding borrowing money (she is happy that Papa has no liabilities on his head and that’s why he will never have to go to work on a job to earn money to pay off any debt)
  • Giving (she reminded us that the annual sponsorship of two kids are coming up due, and is always willing to give away her possessions to anyone who cannot afford them)
  • Enjoying life instead of running after money (she wants Papa and Mummy to stay with her 24×7, even if that means lesser money to spend on dresses etc.)

There are many more things that she will learn about money as she grows older (at least this is what we as parents hope).

In fact, here is a broad plan I am working on to teach her and my six-year old son the several key ideas on money at different points in their lives…

Cheatsheet: What I’m Teaching My Children about Money, and When

This plan is not etched in stone and may change as per changing times. But I plan to follow it, like I have done so far.

I hope this cheat-sheet also guides you in your effort to raise a financially responsible child.

The Bottomline Is…
As a parent, I have learned that the only way we can design our children’s futures is by our own behavior.

So there is no point teaching them (or wanting them to learn) things we ourselves are not doing.

Telling them, “We should not waste money!” or “We should give money to the needy” will, in my experience, not lead them to do what we want them to do.

However, showing them how to not waste money and how to give to the needy will surely lead them to something good.

In short, keeping in mind that our children are not only watching us but learning from us should be reason enough for us to change our behavior before it is cast in stone for them and for their future generations.

I am just writing from my experience, however limited it may be.

I would be happy to hear views from the more experienced parents and grandparents on how they have inculcated safe money habits in their children and grandchildren.

Experience is, after all, the best training manual.

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Reader Interactions

Comments

  1. Jana Vembunarayanan says

    May 8, 2013 at 7:52 am

    Great one Vishal!
    In the 2013 Berkshire Annual meeting this is what Buffett said “Parents behavior impacts their kids more than the amount of inheritance they may receive from them.”

    Regards,
    Jana

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:16 pm

      Indeed Jana! I can vouch for this based on my personal experience. Regards.

      Reply
  2. Radha says

    May 8, 2013 at 9:37 am

    Another amazing post, Vishal!

    This is great insight for me, as I am a new mother – “As a parent, I have learnt that the only way we can design our children’s futures is by our own behavior.”

    I’m sure Kavya will grow up to become very smart with money, given what she is learning from your behaviour.

    Thanks again! Take care.

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:17 pm

      Thanks Radha! And all the based for your own parenthood 🙂

      Reply
  3. Rajaram S says

    May 8, 2013 at 10:17 am

    You hit the nail on the head! Only one point, let the kid learn. Do not force it on them… Let the child create, and let us be there for them.We are a live demo of life to them, we do not need to use words to teach them…

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:17 pm

      That’s the point, Rajaram! Just shown them, not teach them. Regards.

      Reply
  4. Raghu Raman says

    May 8, 2013 at 10:17 am

    Wonderful. Thank you for sharing this.

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:18 pm

      Thanks Raghu!

      Reply
  5. Nitesh says

    May 8, 2013 at 10:45 am

    Very nice Vishal! Thanks for sharing.
    My kid is seven month young, i always think of teaching him about perils of “seven sins” and charlie munger’s “psychology of human misjudgement” whenever he will start understanding things.

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:19 pm

      All the best, Nitesh! 🙂

      Reply
  6. karthik says

    May 11, 2013 at 8:23 am

    Vishal…
    An important lesson for Parents .. True…

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:19 pm

      Thanks Karthik!

      Reply
  7. R.K.Chandrashekar says

    May 14, 2013 at 1:07 pm

    Dear Vishal
    “Papa, money is something that, if we don’t waste, can get us bigger and better things in the future.” That says it all. Vishal, your daughter is a already showing that she is not just chip of the old block but the whole block!! The cheat sheet is literally a spoon feed for fellow tribesman to teach their children all about money. Alas, i have gone beyond that stage, and hopefully will use it to teach grandchildren in the years ahead!

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:20 pm

      Thanks for your feedback, Mr. Chandrashekar! Regards.

      Reply
  8. Litan says

    May 20, 2013 at 10:04 pm

    How does she deal with the peer pressure that she doesnt upgrade her car as often as her friends? I mean I recollect I would never do that in her place . Any tricks ?

    Reply
    • Vishal Khandelwal says

      June 7, 2013 at 1:21 pm

      That’s the point, Litan! Just show it, and she will know it.

      Reply
  9. Ramaraju Chekuri says

    May 24, 2017 at 11:22 am

    Amazing Visual. I am practicing majority of your suggestions since 1 year, I made my wife read rich dad poor dad also

    Reply
    • Vishal Khandelwal says

      May 28, 2017 at 9:18 am

      Great, Ramaraju. Thanks!

      Reply
  10. Himanshu says

    May 24, 2017 at 11:31 am

    Hi Vishal,

    This is a very helpful write up for any parent, keep up the good work

    Regards
    Himanshu

    Reply
    • Vishal Khandelwal says

      May 28, 2017 at 9:18 am

      Glad to know that, Himanshu. Thanks!

      Reply
  11. Raman says

    May 24, 2017 at 2:04 pm

    Dear Vishal,

    Excellent post and useful cheat sheet. Following quote has been a useful guide with my young kids:

    “What you do speaks so loud, that I cannot hear what you say” (Ralph Waldo Emerson)

    Reply
    • Vishal Khandelwal says

      May 28, 2017 at 9:18 am

      Wonderful quote, Raman. Thanks!

      Reply
  12. Vikas Rana says

    May 25, 2017 at 5:24 pm

    Thanks Vishal for the wonderful post, I have been looking for this cheat sheet for a while now 🙂 Let’s see how much of it can be applied at our home 🙂

    Rich Dad, Poor Dad is surely an inspiring read that masses will find it simple enough. It was my first book that got me started on Financial Freedom path..now that was about 15 years ago 🙂

    Vikas

    Reply
    • Vishal Khandelwal says

      May 28, 2017 at 9:17 am

      Thanks Vikas!

      Reply
  13. prosper says

    May 25, 2017 at 5:32 pm

    Nice post.Thanks for sharing.

    Reply
    • Vishal Khandelwal says

      May 28, 2017 at 9:17 am

      Thanks!

      Reply
  14. Shreya says

    May 27, 2017 at 1:18 pm

    It is so incredible to see that this generation children are way more ahead of us. If we can guide them in the right way, its sure to reach great heights.
    A great article for the day 🙂

    Reply
    • Vishal Khandelwal says

      May 28, 2017 at 9:17 am

      Thanks Shreya!

      Reply

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