Financial education should begin in the home. Our attitudes towards money are largely governed by the way our elders dealt with money and whether we were taught about short term gratification or long term gratification.

Short and Long Term Gratification

When children are given everything that they want, when they want it, then they grow up thinking that money is easy to come by and is there to be spend on whatever you want, rather than on what is necessary. When a child gets everything immediately then they grow up with expectations of short term gratification, if they want it they should get it immediately. Children, who have grown up without getting everything they want when they want it, learn to recognize the value of money a lot sooner than those who haven’t grown up this way. Children who have been taught long term gratification have been educated to wait for what they want until they can afford it. These two attitudes are prevalent throughout western society, and in recent years unfortunately, short term gratification seems to have won the day.

It is not good for a child to think that there is always money on tap to provide for what they want because they then fail to recognise that needs such as shelter, food and clothing, come before anything else a person might want. When you give your child everything that they ask for, when they ask for it, you are making it difficult for them to understand the value of money.

Children need to know that money has to be worked for and that people need to pay for the essentials of life before they spend money on indulgences such as play station games, expensive trainers or whatever else a child may want. People who have not been taught the value of money will have trouble in later life managing their own finances. One of the reasons there is so much credit card debt in the west is that these people have not been financially educated when they were growing up.

If you don’t want your child to struggle financially when they go to university or when they have a family of their own, then you need to educate them as to the value of money. When a child wants something that you cannot afford then they need to be told that if they want that item, the only way they are going to get it is to save their pocket money. Saving for things is treated as outdated concept by many people and this is the result of a combination of not being educated about money as a child, and the common assumption that you can have it all and you can have it now. Unless you educate your children about money, they will have a hard time managing their finances in the future.