Are You Giving Your Children Too Much Money? By Usiere Uko

Author of Practical Steps to Financial Independence and business and finance coach, Mr. Usiere Uko, writes about teaching our children the value of money.

The subject of how to make and manage money is not discussed in most homes. Most parents hardly make the conscious efforts to teach their children how to manage money.

Some parents have challenges in managing money themselves, hence cannot offer what they do not have. Others may neither have the time nor see the need to create an environment that will enable them to learn valuable money lesson as they are growing up. They believe their children should not suffer the deprivation they experienced growing up. They think, if they have the money, why put their children through the stress? Many are not aware of the fact that the struggle they faced while growing up made them into who they are today. Without that struggle, their lives would have turned out differently.

Many children have no clue how their parents make money. Many think that you can walk up to an ATM and collect money as much as you want. At 10, my daughter was surprised when we visited an ATM and I was not able to collect the amount of money I wanted due to insufficient funds. I had to explain to her that the reason I could not withdraw that amount was that I did not have enough money in the account; hence, I had to reduce the amount I wanted to withdraw.

Raising street-smart children

The first thing that comes to the mind of most children when they see money is what to buy with it. Many carry this into adulthood. Many have no idea their job is to grow whatever comes into their hands, hence the need to have savings and investments, no matter how little they earn.

I attended a Parent-Teacher Association meeting in my children’s school sometime ago and during the matters arising session, one parent stood up to complain bitterly how her child was taken advantage of during the Talent Hunt Day set aside for students to showcase their talents and a trade fair. A fellow student sold her son a tiny slice of pizza for about N800. She felt her son was exploited and demanded the school to ban stalls from operating during the talent hunt day to forestall a recurrence.

One of the dads who spoke on the issue did a good job of it. He stated clearly that parents ought to bring up their children to be street smart in order to understand the value of money. This includes not giving them too much money to play with. If the boy in question had less money and an idea of the cost of things, he would think twice before making the decision to shell out so much for one slice of pizza, since he still needed to buy drinks, ice cream and other things. For the prudent one, he would set aside part of the money for his piggy bank.

No one put a gun to his head to buy the overpriced pizza. There were offer and acceptance. He ought to have negotiated, which might make him understand that the piece of pizza was too expensive. The parents cannot be looking over his shoulder all the time.

The man went on to share how he took his children to the farm, starting from the clearing stage to planting, harvesting and marketing. The children were shocked at how little money they made after the maize was harvested. Since then, they had seen money in a new perspective based on the efforts they had put in to get so little.

According to him, he gave each of his children N1,000 for the Talent Hunt Day and some of them still came back home with change.

For the programme, I gave my children even less, and encouraged them to learn to sell. Though they have not taken a stall yet, they help their friends with stalls sell. The school provides lunch and snacks, so the money is essentially pocket money. They often come back with more money, being commission from sales made for friends.

Our children need to be street-smart in addition to being school-smart. Academic intelligence is not an indicator of future success. Often, it turns out to be the opposite. You often see ‘A’ students working for ‘C’ students. Life happens outside the four corners of school and home. If we want our children to succeed and thrive in the marketplace, they need to be prepared right from home.

Raising the next generation

There is a clear danger in raising a generation that is not ready to take responsibility to maintain what has been handed over to them and take it to the next level.

The principles of success do not change from generation to generation. There are no viable shortcuts for bypassing the rigour of the process that produces sustainable success. If you build an engine and hand it over to your child without teaching the child how to build it, they will not be able to fix it when it is broken or build a better one.

Some prominent families have dropped off the radar at the passing of their patriarch. He took the formula with him to the grave, leaving the children to grope in the dark.

There is some comfort that comes with the attainment of a certain level of economic success. Rewarding your children for work not done is shooting the next generation in the foot. There is nothing wrong with allowing your children to enjoy the comfort you can afford. The challenge comes when they don’t understand the process through which you make money and have no experience making money themselves. They may be forced to start again from the bottom when you are gone.

Why create problems for the next generation through instant gratification rather than allow them to go through due process? When you see a grandparent paying school fees for the grandchildren and sending subsidy to the children, something is wrong somewhere.

The children you do not build may end up wrecking what you laboured decades to build. Are you giving your children too much money?