Saving money: Teach them young
Parents should educate their children on money matters.
Washington: Just as the common notion goes that first education starts at home, a new study in this regard suggests that a worthy lesson that parents can impart in their kids is about money and how to use it in the right manner.
The study published in the Journal of Family and Economic Issues, details how financial-giving habits are passed down through generations, and how it may contribute to personal and financial well-being later on.
A total of 115 participants were interviewed for the study, including college students, parents, and grandparents, about what they learned about money from their parents. The parent and grandparent participants also were asked what they taught their children about the topic, ultimately providing researchers a picture of how financial lessons are shared across four generations.
Participants were not asked to talk about financial giving directly, yet nearly 83 per cent of them brought it up as an important part of the financial education they gave or received.
"When you think about money and what kids learn about money from their parents, most of us wouldn't think about giving as one of the basic principles of finance," said researcher Ashley LeBaron, University of Arizona.
"We tend to think more in terms of budgeting and saving and things like that, so it was surprising but really cool, to see that giving was so prevalent."
Participants described different motivations for teaching their children about giving, including a sense a religious duty, a desire to help others and a desire to give back. They generally talked about three different types of giving.
Charitable donations: This included monetary gifts to religious or charitable organizations.
Acts of kindness: This incorporated donations, gifts or acts of service provided more directly to people in need.
Investments in the family: This category encompasses financial decisions made by parents to benefit their children or family.
Researcher LeBaron said that from a practical standpoint, it can be a good way for kids to learn financial basics, like budgeting and saving. "If a certain percentage of your money goes toward giving, that's the start of a budget right there," LeBaron explained.
"People who are generous tend to be happier and have healthier relationships, so this is shaping not only kids' finances but aspects of their health and well-being," LeBaron said.
She also added that parents who already make it a habit to give financially should make it a point to let their children witness that behaviour. Or even better, they should consider involving their children directly in giving activities.
During the study, researchers also found that just as parents can influence their kids' financial behaviours, so, too, can kids influence their parents.