Guest post by Brian Nelson Ford, 8 Pillars
As a father of three incredible children, I want my kids to live amazing, fulfilling lives. As a personal finance educator, I understand the important role that money management will play in either aiding or hampering them on their journeys through life.
I feel so passionately about preparing my children financially that I wrote my first book, Marshmallows and Bikes, on the subject. The book references a well known experiment where children were given one marshmallow and told that they could eat it or wait 15 minutes and receive a second marshmallow. Take a moment to watch this brilliant video clip illustrating the book’s primary object lesson.
Although amusing, that brief video clip also demonstrates the real temptation of relatively easy credit. When you can have the marshmallow now, why wait? Isn’t one marshmallow in the hand better than two roasting in the fire pit?
Learning financial patience and discipline is not always easy or intuitive. Observe the mess our economy is in now, and you can easily recognize the fact that millions of Americans never learned how to delay their own gratification.
One of the most important and fundamental life lessons for children to learn is the principle of delayed gratification. Not many generations ago, the national slogan seemed to be, “Use it up, wear it out, make it do or do without.” People saved money for long periods of time before they purchased things. More and more the modern slogan has become, “Buy what you want, no matter the price; charge it now and pay for it twice.”
Teaching children this lesson early in life will serve them well as they mature. Money lessons must be age appropriate, but you can begin object lessons like the one with the marshmallows with children as young as age three. Between ages 6-9 you may want to begin a weekly allowance for your child, which can provide many choice opportunities to teach saving versus spending and the benefits of delayed gratification.
Ultimately, children learn best by example, so make sure that you have your own financial house in order. Share your advice and personal success stories with your children, nephews, nieces, grandchildren, and so on. When your own children observe you “doing without” in order to save for something better, they learn that money is an instrument subject to our control, not a master that keeps us from having things we want.
Let’s all take the time to teach children that money matters only as far is it serves the values that matter most in life. The time we invest in the financial education of the next generation may eventually prove to be the best investment we can make in the future of our society.
Brian Nelson Ford is the founder and president of 8 Pillars Financial Education Company, the leading provider of workplace financial education. It helps the best companies engage and retain a talented workforce by providing employees with real-world financial education in a fun and entertaining format.