If we’re talking about sizzle, Financial Literacy Week (October 30 to November 5) doesn’t quite stack up against the goodie-laden freight train of holidays headed our way. But Gail Vaz-Oxlade, author of many money books, including Money-Smart Kids, says this is a great time of year to start talking to your kids about how to be fiscally savvy — or to take their learning to the next level. Here’s her (ungilded) advice.
Today’s Parent: Knowing they’re going to get gifts over the holidays just seems to bring out the greed in kids.
Gail Vaz-Oxlade: That’s because we’ve trained them to have the gimmes. Parents need to model financial responsibility, not just talk about it. When was the last time you went into a store with your kids and walked out without buying anything — on purpose? You can say, “We’re going to have a look for your Uncle Steve’s birthday present. But I don’t have the money today and I’m not buying today. So let’s just go in and have a look.” It gets them away from the expectation that you’ll buy something for them every time you go into a store.
TP: So, sponsoring a family for the holidays is a good idea?
GVO: Yes, and you talk about why you’re doing it: “We have more than other people have, so we’re going to take a little of what we have and give it to someone else.” And it isn’t something you do once; these are ongoing conversations. I remember the first time I went shopping with my daughter, Alex, for presents that she wasn’t going to keep. The first time went fine — I had explained that’s what we were doing. The second time? She wanted to pick up two of everything. I had to explain all over again.
TP: Even among financial advisers, there’s disagreement as to whether kids should get allowance and if they do, whether the money they receive should be tied to the household chores they’re expected to do. What’s your take?
GVO: An allowance isn’t more money; it’s money that you normally spend on your children put into their hands so they can manage it. Give them some costs; put some responsibility in their hands. Grade six is a good time to start — but if you have a precocious child with three older siblings, you may have to start at age four. So when you’re in a store together and your kid asks for chewing gum, you say, “Mmm-mmm, that’s why you get an allowance.”
Don’t laud your kids for putting every penny in the bank. My son, Malcolm, was like that. He wasn’t saving his money — he just wasn’t spending it. Kids should put away 10 percent of their allowance for saving, five percent for sharing. The rest is for spending — to learn how to manage and how to make choices.
TP: And then a relative swoops in and blows all of those lessons away by showering your kid with too many gifts, too often. How do you handle that?
GVO: You say, “If you give my child another toy, I’m not going to give it to her. It’s wonderful that you want to share what you have with my child, but you have to respect my parenting.” I don’t know why people have an aversion to the truth. Better to hurt their feelings once than to keep saying, “Oh, no, that’s really too much.”
Acquisition does not make people happy, but experience does. If you want to give your niece, nephew, grandchild a great gift, offer to take the child to the movies three Sundays from now. The countdown to the movie is worth more than the cost of the movie tickets.