Childhood Lessons in Financial Management

Money. The very lifeblood of our well-being and security and an essential aspect of our everyday lives. Like many things in life, learning how to handle money is crucial to being content in life. Be it the means to make the money we need or deal with it; there are essential lessons we all accrue in our lives. And we begin this process right from our childhood.

As a child, we watch our elders deal with money through a variety of experiences. The power and significance of money hardly escape our attention. There is ample evidence that our experiences with money as a youngster shapes our approach to it, as an adult.

As grown-ups, we all have specific indelible memories about handling money during our childhood. It is a piggy bank, an account for minors in a bank, choosing a gift for a classmate, picking up home needs at the local grocer, being the treasurer for a school event, or perhaps a door-to-door collection for a charity. There are innumerable instances that had us dealing with money. Some of us probably had parents openly talk about income, investments, and household budgets. These experiences and observations provided us with several opportunities to understand the nuances of earning money and dealing with it.

Let's look at some of the significant aspects of managing money that we usually pick up as kids.

• The Importance of Money

  This is probably the first thing we learn about money. From the moment we lay our curious eyes on a purse of cash and watch our moms & dads’ fish it out now and then, we realize something precious about those pieces of colored paper and the coins.

• The Lesson of Affordability

  As kids, we demand a gaming console with the same vigor as a cone of ice cream. But when we begin to assimilate our elders' responses, we realize that sometimes the cost of an item makes a difference. Some things are handed to us, but certain things are either denied outright or set aside for an occasion.

• The Exercise of Choice

  We need to choose between flavors of a treat or choose between two sets of clothes. We are rarely bought everything that catches our fancy. We see our parents eyeing the price tags. We realize that there is a finite number involved in the equation. Some of us quickly grasp the idea of making the most of what is available.

• The Process of Budgeting

  Much like exercising choice, we learn to work within set budgets. Beginning with the school canteen, and as we enter our teens and begin to step out with our friends to the movies or the mall, budgeting becomes everything. We learn to pool our resources and be conscious of our contributions.

• The Penchant for Saving

  Remember the practice of having to spread out our various wishes? Something for the moment, another item for the festive season, and something else for our birthday? Guided by parents during our early years, we quickly pick up on the habit to save up for the perfect moment. The piggy bank probably came in handy for a lot of us.

• The Risk of Loans

  Whether we were a borrower or a lender, the cautionary lessons were quick and fast. Relationships have been made or broken on many a loan during our growing years. Some sensible parents teach us the foresight, the pitfalls, and the best ways to handle the slippery slopes of lending or borrowing. Or, through sheer experience, we educate ourselves.

A final word

We are grown-ups today, and amidst our finances, many of us have children who need to be taught the ropes of managing money. We must ask ourselves what we learned from our parents and how their attitudes shaped our attitudes about money. And, critically, are we taking the required steps to instill in our children the prudence and wisdom of dealing with money.

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