Exploring Money Personalities in Children: Teaching Financial Management

Everybody has a money personality; whether you’re an adult or a child. I’m sure you’ve noticed some traits your child exhibits around money. From a young age, they begin to show the characteristics of a spender, saver, negotiator, planner, or a philanthropist.

Behavioral scientists like David Whitebread and Sue Bingham from the University of Cambridge declared in a study that our financial skills, attitude, and values are set from the age of seven. This means at the age of seven, you were already equipped with the money skills that you use even till this very date.

Here are some traits that you must have noticed in your children;

1. THE SPENDER

Spending Amara feels anxious when she has cash in her hand. She feels she’ll misplace her money or it will lose its value if it’s not spent. Spending Amara can also feel money should be spent because she’ll probably get more from her Parents.

Spenders like Amara have this mindset and mentality that money will always be replaced no matter what happens. While at the moment, she can get more money from her parents, she’ll soon grow up to become an impulsive spender and will have a hard time understanding the difference between needs and wants.

HOW DO WE HELP SPENDERS LIKE AMARA DEVELOP THE SAVINGS HABIT?

• Encourage your child to set short-term financial goals: You can give them a target to meet/reach and attach an incentive to it. For example, set a target to save 500 naira every week and at the end of the month, they get a thousand naira(1000) extra. By doing this, they learn delayed gratification and can reduce their impulsive spending.
• Help them create a budget to track their spending and develop wise spending habits

2.THE SAVER

Meet  Rita the Happy Saver; Rita can turn anything into a Kolo box. She’s always excited watching her money grow. Sometimes she has a savings goal, other times she saves to buy a dress or a shoe, or beverages. Rita has already cultivated the habit of saving. For a child that already knows how to save, how do we encourage them to do more??

HOW DO WE ENCOURAGE CHILDREN LIKE RITA TO CONTINUE SAVING?

• Introduce the importance of saving with Long Term goals and saving for the future.
• Teach them about interest and the benefits of saving and investing.
• Encourage responsible spending while still appreciating their inclination to save.

3. THE PLANNER

Peter, The Planner enjoys organizing and managing finances. He probably already has a list of things he wants to spend on for Christmas and the New Year. He’s a budgeter. He must’ve calculated all the money he’ll get during the Holidays and the party planned for his friends. Planning is good and Having an organizational trait is admirable but do we stop here?

HOW CAN WE MOTIVATE PLANNERS LIKE PETER?

• Encourage long-term financial planning and goal setting.
• Introduce concepts like creating budgets for more significant projects, tracking expenses, and managing income.

4. THE NEGOTIATOR

Chioma the Negotiator will never agree to the price she sees, she’s already practicing the pricing methods of Nigerian mothers in the market and sweet talking her way into your heart so you give her more money. The funny thing is, she always has a good reason why increasing her allowance is for the benefit of everyone. If your child behaves like Chioma, you’ve got yourself a gold mine!

YOU CAN ENCOURAGE HER BY;

• Emphasizing the importance of balanced quality and value. Even if she wants to get the best deal, teach her that considering the quality and the value of whatever she wants to purchase is very important.

5. THE PHILANTHROPIST

Philip the Philanthropist has one of the most beautiful qualities a human can possess. He enjoys making others happy. He loves giving and making a positive impact on others. You’ll find generosity and concern for others in people like Philip.

HOW DO WE MAKE SURE PHILIP MANAGES HIS MONEY HABITS AND STILL KEEPS HIS PHILANTHROPIC NATURE?

• Teach the importance of empathy, gratitude, and responsible giving.

Understanding and embracing the diverse money personalities that children can develop is crucial in teaching them practical money management skills. By recognizing your child's spender, saver, planner, negotiator, and philanthropist traits, you can tailor your approach to ensure they receive the most impactful financial education.

Remember, a well-rounded financial education incorporates elements of saving, spending, planning, negotiation, and philanthropy. Using Little, you can instill these principles in your children and help them adapt to their money personalities, Using the Savings feature, you can set them on a path to financial competence and independence that will benefit them throughout their lives. Ultimately, nurturing their money personalities fosters a healthy relationship with money and equips them with invaluable skills for a prosperous future.

What are your children’s money personalities and how have you been able to shape their personalities so far? Let me know in the Comments section

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