Leading By Financial Example

We have a friend who’s son complains that she only ever looks when she is shopping, and never buys. Now, Sheila lives in a pretty nice condominium and is usually neatly and fashionably dressed, so we know she must sometimes actually buy things – but her son’s perception is that she looks and looks and looks before making a decision. To Sheila we say “good on you”. She may not even realize it, but she is teaching her son to think before he buys, one of the best life lessons ever if you ask us.

There are many parenting adages that underscore the importance of leading by example, but perhaps the best well-known is: Do as I say, Not as I do. The irony here of course is that most of the time, our kids actually do as we do, and not as we say! In extremely negative cases, children consciously elect not to live as their parents did, because they have experienced or seen the consequences of for example, living in excessive debt, but most of the time, “The Nuts Don’t Fall Far From the Tree”. So showing your kids that you are thoughtful and careful about money is critical to giving them the best gift ever, financial literacy, or “money-smarts”.

Demonstrating being thoughtful about money is admittedly harder for today’s parents. We saw our parents standing in line at the bank on pay-day, waiting to withdraw cash they could use for the ensuing weeks’ purchases. We saw our parents counting out bills and coins to determine if there was enough to pay for the items at a check-out counter, and physically cutting coupons. Most kids today see their parents using “magic” plastic cards to help them get everything from a morning coffee, to a tank of gas, cart of groceries or even tickets to a movie. Today’s electronic payment methods can be wonderful family finance tools, but they can also give uninformed children the impression that almost everything in life can be had by pulling a plastic card out of their pocket – or waving their phone in front of a payment station. Asking our children to complete Gift Surveys in advance of purchases, or when making wish-lists, really helps to underscore that money is in fact finite and scarce.

If you are looking for a way to successfully lead by example and model some sound financial habits in today’s largely virtual financial world, why not ask your kids to complete Gift Surveys the next time they are deciding what they might like for an upcoming birthday or holiday gift? Instilling the habit of thinking before buying with a modern-day tool such as Gift Surveys can help replace the visual cues we all received when we saw our parents counting out bills and coins or standing in line at the bank on payday.

Kids are not wasteful by nature; what they are, is inexperienced. Gift Surveys are a quick and easy way for children to gain experience making more thoughtful choices. It takes less than two minutes to use our calculators to generate a cost summary and DIMS (Does It Make Sense) Score for a potential gift or purchase. To see just how quickly and easily Gift Surveys can be completed, click on the pink or green buttons below.

Is Sheila purposefully leading by financial example when she “looks and looks and looks” as Dawson describes it? Of course not – she is just living her life. Her son doesn’t like waiting around for her while she researches what makes sense and plans purchases. But when he is a young man in charge of his finances, successfully able to live within his means and help support his own family, he might see her behaviour in a different light. Until then, Sheila tells us she is more than happy to have Dawson recreationally complain to others about her shopping habits. “I can’t stand to be wasteful, and I have learned over the years that I am just much happier with carefully made purchases.” Music to our ears Sheila, music to our ears!

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