Talking to your kids about money

My daughter is 11 years old this year and she is the owner of a “treasure” – as she calls her savings, with 6 zeros – quite a lot compared to her peers. This “treasure” is accumulated from many sources of income: monthly pocket money from her parents; annual academic achievement bonus; royalties (she is currently writing articles for youth and children’s newspapers); lucky money…

My husband and I taught our child the first lessons about money very early, around the age of 3-4, through games, scenes, and shopping trips with his mother... When he turned 6, celebrating his entrance into first grade, he was very happy when his parents agreed to let him keep all of his money from the above sources of income, and to have full authority to deal with that money in any way he wanted - as long as he reported it honestly and clearly explained the reason for spending the money to his parents. We also made it clear to him that this reporting would end when he turned 18. At that time, we hoped that he would be completely financially free in the sense of being proactive in both income and expenditure.

By chance, when sharing this story with friends and families, my husband and I encountered many opposing opinions, even criticism. Most of them thought that we were the model parents, formalistic, imitating the “Western” way of raising children, and that doing so would only spoil our children and not be of any use. “Who would let a child hold money?”; “What does he know at such a young age, so why give him money to keep?”; “You guys be careful, watch out for your child going to school and getting scammed, and he will take all of it”; “Having money spoils people, and then you spend all day shopping, spending it on online games, just you wait and see”…

Thinking back, what people advise is partly right, but that rightness based on general fear is not the standard that my husband and I think we should follow. From a personal perspective, we think it is never too early to teach children about money. Understanding the value of money and learning how to spend money is just as important as learning how to save and earn money. This should definitely be a mandatory, necessary course for every child.

Most of us are crazy about money. Money has a magical power, even the most indifferent person, when hearing about money, must perk up his ears. That's why there is a folk saying, roughly: What can't be bought with money can be bought with a lot of money! Sounds crude, but it's true. Money connects the intestines, is the main source of sadness, happiness, joy, and suffering of mankind. People are honored and disgraced because of money, respected or despised by the world because of money. Money is inanimate but has unparalleled power. Money is a fairy but money is also silver. Money is valuable but also dangerous. Adults know this clearly, so why don't we teach children early so that they understand and nurture the concept of money properly? If we don't know how to control money, money will control us.

My husband and I taught our children that money is a means, not an end. Many people spend their whole lives struggling and being unhappy because of money because they confuse the two. Money is used to build a house but not to create a warm family home; money is used to buy comfortable furniture but cannot buy peace and satisfaction; money is used to buy delicious food to fill the refrigerator but cannot buy the feeling of happiness when having a warm family meal; money is used to buy positions, power, or even to avoid prison but in the end cannot buy forgiveness from the court of conscience and karma...

When teaching children about money, the first lesson must be the lesson of spending money through screening, delaying gratification, and temporary satisfaction. Spending money is easy but also very difficult. Children go to the store, look at a teddy bear, like it so much they want to buy it right away; but parents teach their children to slow down a bit, think carefully about how many bears they already have at home, what is different about this bear and the bears at home in terms of design, color, material, size..., if different, is it worth buying more, and if not much different, should they buy more? That process of stopping for a moment to think gradually creates in children the habit of considering spending money on things that are really necessary, avoiding waste. When children know how to spend money well, parents will suggest and guide them to effective channels to save money. My husband and I believe that when a child understands money correctly, knows how to spend money, and save money well, then the final lesson of earning money may not need to be taught because they will know it themselves.

These days, talking to children about money is becoming more relevant as shocking incidents continue to occur: a nanny kidnaps and murders a 2-year-old child for ransom; a suspect kills and dismembers a 17-year-old beauty pageant runner-up over a debt of 50 million VND; someone is stabbed to death for demanding money at a drinking table; a series of actors and models… advertise false health supplements for money… That’s how scary it is! Money, if placed in the role of a servant, will be a good servant; but if raised to the role of a master, it will be a bad master. Therefore, it is never too early to talk to children about money, because if you don’t teach them, someone else will replace you later, such as creditors, police, and even scammers. And the price will be too high…