Jude called me over for dinner yesterday. After a sumptuous meal, we were lounging and discussing our work in general and our plans for the holiday seasons. I noticed Jude’s partner forcing their son Nick to finish his meal. The ‘finish-it’, ‘I-don’t-like-it’ argument went on for a while. Finally, they had to give in to their son’s demand. Jude ordered a pizza for Nick. And the food on Nick’s platewent straight to the garbage can. At a time like now, when inflation is up, people are losing jobs and grocery bills are hitting the roof, what a waste of food and money.

I spent the night thinking whether we teach our children the value of money. When we insist on children being obedient, polite and good mannered, isn’t it also important to let them know the value of money. Here’s what occurred to me on how we can start doing that.  

1.    Take them out grocery shopping Taking kids out for grocery shopping will help in letting your child know the price of stuff that he dumps. You can explain to them how the price of a jar of mayonnaise that cost lesser last month, has shot up now. Of course, you may have to deal with pester power when you cross the toys section or cookies counter. Be prepared. May be you can tell them that they have a fixed sum, like  $3-4 or for themselves and they can shop for what they want anything. So your child can choose either from buying a box of cookies or a fancy toy.

2.    Gift them a piggy bank This is the oldest, time-tested way to teach children the value of money. Ensure that the kids save the money that they earn or receive as gift in their piggy bank. Let them learn how little cents saved over time pile up to a few dollars. Insist that they should not break it until there is a need to do so.

3.    Give them little incentives for extra work done You can gift them a few cents whenever they help you with an extra errand, whether it is helping you paint the fence or fix the leaking tap. Let them know how much you have saved by doing it yourself. You have to be really careful here. Let the child not believe that he can expect incentives for doing his routine tasks like setting the dinner table or cleaning his room.

4.    Send them for summer jobs Summer jobs are an excellent way to make your child learn the value of money. It may be things as simple as babysitting or running errands at a neighborhood store. It helps the child know that nothing in this world comes for free. Everything has a price. You will certainly see a difference in your child’s attitude.

5.    Take your child to the bankThis will familiarize your child with the basics of banking and financial planning. Let them know how interest rates work when you deposit or borrow money. Show them how money deposited is both safe and grows over time.

It is important to let our children know our financial position. We need not exactly prepare a balance sheet of our income and expenses to show our children. But sitting with the child and explaining that Dad cannot afford that new play station this month or that swanky car that his friend’s father drives, will make them better and more mature adults.

I’ll never forget my first paycheck. When I was a kid, my parents gave me an allowance for doing chores around the house, although I think I spend more time trying to figure out how to get out of doing them. I earned additional cash here and there mowing lawns, babysitting, and I even had a paper route for all of a few weeks. But, I’d always been paid in cash or the occasional personal check. My first real paycheck was something different. All of a sudden, I was a wage earner and a tax payer and it made me proud. Made me feel grown up.

Of course, that first paycheck and the ones I collected for the next few years were meager and were usually spent in an afternoon at the mall and an evening of pizza and beer with friends. The days leading up to my next paycheck were usually pretty sad. I lived a duel life. I was rich, then poor. Rich again, and then poor…you get the picture.

Much to my surprise, when I finished school I was employable and joined the White Collar workforce. Now my paychecks feature a couple more digits and a comma separating them! What a time to be alive! The extra cash lifted me out of the boom and bust cycle I’d been in since that first paycheck. All of a sudden I had more money than I knew what to with. So, I did what any good American does. I went out shopping!

First, I upgraded my car and then I moved into a new, bigger apartment with a friend. Next, I furnished that apartment; flat screen TV with surround sound, sofa, chairs, tables and random things too numerous to list. My place is great and I my ride is ‘Pimped’, but guess what? I’m now back to that boom and bust cycle I thought I’d left behind forever.

Turns out, after I pay the bills my much bigger paycheck looks a lot like that first one. It feels like I’m now paying a lifestyle tax and that tax eats up a lot of my earnings. But hey, I’m college educated, I should be able to figure this out, right? Well actually, I have figured some of it out. Since I didn’t acquire and pay for my new lifestyle as part of some organized plan, when the major spending was over, the aftermath was just a bit shocking. But now I do need a plan. A plan for how to budget my money so I know how much I have left to spend after my bills are paid. And I need a plan to execute and track my progress.