Good Money Habits Lead to Success

By Sunny Istar Lee, Certified Financial Coach

How can good money habits lead to lifelong success? Because our life is the sum of our habits, and our future success depends on the habits we have now. It’s no secret that children imitate what they see and hear from people around them, especially their parents.

Childhood habits lay the foundation for later success or failure as adults. It’s easy to see that dynamic in language acquisition, food preferences, cultural memes, or communication styles. It can also be what sets the stage for expectations of self. When we teach our young children from the start that they’re capable and masterful, they learn to expect that of themselves. That expectation created in the beginning of childhood drives their future striving as they go on to the more sophisticated goals of adulthood.

ENGAGE YOUR CHILDREN IN ACTIVITIES

Humans are social beings and children are a good example of this. Participation helps them learn what it means to be a member of your family and community. This is a great way to teach children teamwork, collaboration and coordination. They can learn the relationships between tasks and rewards in their own homes. Some parents resist rewarding children with money for helping around the house. This parenting philosophy says that household chores are everyone’s job. It is a duty and a responsibility. That’s a valid point of view.

However, some parents like to reward their children for the chores they do and use this as an opportunity to teach them about money and work. Often this is a child’s first income or their only income for savings. Their view is that hard work deserves recognition and acknowledgment. Whatever your perspective, give them a way to go above and beyond the call of duty, work hard for a great goal, and reap the rewards at the end. This reinforces self-discipline, persistence and an understanding of financial responsibility from a young age.

TEACH MANY IMPORTANT LIFE SKILLS EARLY

Teach your children life skills such as health, academics, safety, morals, faith and creative expression. Many parents teach their children how to swim, ride a bike, deal with earthquakes, avoid talking to strangers, etc. But financial literacy often falls through the cracks of early childhood education. How many parents ask their children, “How do you make and save money?”

From my own experience, I personally believe that even a three year old can earn money by helping around the house and being rewarded for it. Being the sponges that they are, young children want to do what adults or other family members are doing. Your three year old or even younger often enjoys helping with laundry, watering plants, or rinsing the dishes. Sometimes teaching life skills can start with asking your children big questions, like “What does success mean?,” “What is the purpose of life?,” “What do you need to learn to achieve your goals in life?” Try to give them as clear answers as possible about various aspects of their lives and teach them valuable life lessons or skills.

USE EVERY OPPORTUNITY FOR FINANCIAL EDUCATION 

For example, let’s say your two-year-old is holding a loaf of bread and the other little kids are holding bags of groceries in the car. Tell them they can earn 25 cents by doing extra activities, like putting away cans and organizing things, instead of going out and playing right away. You can use this scenario as an opportunity to kickstart your child’s financial education.

Subsequently, let’s assume they all have their own piggy bank and you encourage them to deposit their coins there. If you give your children tasks and reward them often enough, they can develop savings habits early on and understand that money should also be saved, not just spent immediately. By regularly checking their savings and talking about how their money is growing, you can help them connect the dots of income, savings, investments and future goals. Instilling healthy attitudes about money from a young age means your child can cope with increasingly complex situations as they go through life. Rewarding them for extra effort teaches them to set their own standards of excellence and expectations.

As parents, one of our responsibilities is to teach our children to be Money Masters – to earn and manage money for their own benefit and the world’s benefit. If we don’t teach, who will teach? Probably no one does.

Then, instead of being Money Masters, they can become Money Monsters who earn and spend money as they please, asking others to give them money, or scraping together never enough to feel safe, healthy, and generous.