Our values are the guiding principles that shape our character, who we are. We all know that. We also know that our values help us decipher right from wrong. So we pass along values to our children because we want them to be good people, happy and successful. For the most part, parents want their kids to work hard, be respectful, honest and loyal. But if we want our children to be happy, why don’t we instill the value of “being a saver” in them?
A great deal has changed for human beings but much in fact has not. Like the fundamental answer to what makes us feel safe? Based on Maslow’s hierarchy of needs, the answer is security. That is security of family, morality, and interestingly, security of employment, property and resources. Translated, Maslow was referring to a roof over our heads that is safe and secure and the ability to sustain ourselves now and in the future. These are among the very basic needs that remove fear so we can pursue other needs, which may be considered less vital, yet they still allow us to be fulfilled and happy.
When we research topics at ING DIRECT around what “savings” means to people, we often hear about freedom, security, help on a “rainy day”. Knowing you have savings to fall back on allows people to feel more secure, less worried which in turn gives them the ability to be happy and fulfilled. This is quite powerful, even simple to understand, yet, it remains a struggle for so many. So why don’t we teach this to our kids? Why aren’t we instilling a saving mentality early on so that it stays with our children their entire lives?
Many people think that money is the root of all evil. This is incredibly misconceived. Money is not the problem in our society – greed is. Living beyond our means in order to keep up with neighbours or friends… these are the evils. There is absolutely nothing wrong with having money. In fact numerous studies prove the connection between money and happiness. I am not arguing that money itself will buy our kids happiness, but according to Maslow, without a base amount of money to fulfill our vital needs, being happy is very difficult. What we teach our children to do with money arms them with the tools to shape their future and happiness.
Savings provide a sense of financial security, or personal freedom that enable us to have choices in our lives. When we have a level of control in our busy lives we tend to stress less. Savings does allow us to buy something extremely valuable – a sense of freedom! A jumping off point from where we freely pursue happiness.
Think of a time when life threw you a curveball and you hadn’t saved up for it – lost a job, car accident, financial crisis! You probably felt vulnerable, helpless, worried. If you had ample savings to fall back on, you may have just breathed a big sigh of relief knowing you could weather the storm. On a more positive note, because you were a saver, you are that much closer to fulfill a dream. Isn’t that a fantastic feeling? You can retire early, buy your dream car or take your kids to Europe for the summer.
Not having options is a predicament no parent wants their children to experience. Children are impressionable. They absorb information that shape who they become as adults. So why not take the opportunity to help them understand how something as simple as compounding interest is, quite frankly, the easiest route to security? You already know this: the earlier you start, the more you get. So why not arm them with this life long habit?
Kids are actually eager to learn about money. Thirty-six per cent of kids we surveyed aged 11-14 wished their parents would talk to them more often about how banks work, and twenty-seven percent want to learn more about how to save. There is a natural curiosity about money. And the beliefs we form about it are formed in the same ways as all of our other beliefs – with information, knowledge, and conversation.
Engaging kids often and at different ages to decipher their level of understanding of money is crucial. They may not comprehend it fully, particularly at a very young age, but those are the conversations that arm children with the comfort to ask, inquire and think about the choices they make. You’d be surprised what they already know, as we find out in this video.
The mistake in avoiding money talk leaves your impressionable children to learn that happiness is a toy, or a pair of shoes, or a flat-screen TV. Okay, maybe there is a bit of joy in having a flat screen TV, but not at the expense of feeling safe, secure, and fearless. Or at the expense of accomplishing life altering goals, dreams and experiences.
The bottom line is that the effects of savings on emotional wellbeing and security are significant. The next time you talk to your children about dreaming big, or getting an education, or being good people, I hope you would consider instilling the value of saving.