Lifestyle Architect Series - Financial Literacy for Young People : Episode - 2

Published By: Susan Ritter | Fri, Sep 10, 2021


When was the last time you saw a frazzled parent trying to deal with a toddler temper tantrum in a store? This scenario has played out over and over again as youngsters experience their first sense of scarcity by not getting something they want. Teaching our children that giving and receiving are both critical parts of a value exchange, after abundance has been all they ever knew, is one of the important lessons. Doing it without creating a scarcity mindset is critical to preparing our children for the realities of the 21st century. As part of this recording, I provide some ideas on how to apply the concepts for teenagers as well. After listening I'd love to hear what type of actions you have done with children in your life to instill an appreciation for providing value.

For most of us in the first world, our first experiences in life create an abundance mindset.  Whatever we need just magically shows up even before we know we need it.  It happens so easily that we don’t even appreciate the difference between things that we receive as part of living and things we receive as gifts during special occasions.  I remember being disappointed that my toddler was not impressed by his birthday presents.  In his mind they were just more of the same.


Over time, as parents and guardians we have to teach our children that abundance is not magic, it is the result of effort.  The effort we make as adults provides the benefits that are showered on our children.  The first experience of scarcity is like a right of passage.  It usually occurs in a store where a young child is demanding a toy or treat to be purchased and the adult is denying the request.  This situation often results in a temper tantrum for all to witness.


As the adult in the exchange, this is a chance to create a learning moment.  The situation has been created because the child sees the denial of their request as something arbitrary.  In the past they always received what they wanted, and now, inexplicably they are not getting what they want.  

What is the lesson we want them to learn?

It shouldn’t be a lesson in scarcity – although that is usually what it becomes.  Phrases like “money doesn’t grow on trees” or “you already have too many”.  

Instead, it should be a lesson on value exchange, and if you want to avoid the temper tantrum, the lesson should begin at home before visiting the store.  What would this lesson look like?

As early as 2 years old, children become aware that they are a discrete and separate human being,  and they fight for their independence.  By the time they are 3, they want to apply that independence into helping out.  They love to be the cook, or the babysitter of their younger siblings; take care of a pet or push the vacuum cleaner around.  They are learning the skills of life by watching and doing.  

These are the natural tendencies that we all have, to engage with and manipulate our environment – something that is truly human.

With awareness, parents can leverage those natural growth milestones to start teaching the relationship of exchange.  First just by rewarding the behavior with recognition, but eventually with things that are more tangible.  When your 3-year-old takes on a task and accomplishes it the best they can, let them know they have provided value.  Explain to them that their initiative has saved you time and effort; that makes you happy.  As a result, you’ll see them looking for other ways to earn recognition by giving first; and eventually you can associate that effort with a tangible treat as a reward. 

With this association in place the next time you go to the store, when your child asks for a toy or a treat, you can ask them what they did to earn it - enforcing the association of trading value for value.  

At some point you will likely find yourself in another conversation, as I did, of persuasion and negotiation.  A conversation where the child will try to justify a more expensive treat in exchange for the value they have provided.  These are all human interaction skills that will help your child learn Dale Carnegies art of “Winning friends and Influencing People”.

If you’ve missed the opportunity in the early years, there is still time.  However, you may need to first break down some of the entitlement attitudes that have likely developed.  At the pre-teen and teenage stages, children have been forced through relationships with others outside the family to recognize that sharing and fair trade is expected in society.  The trick is to bring that knowledge home and create an environment where those behaviors of fairness are integrated into the relationship between you and your children.  

It often requires a level of tough love, especially if you’ve been something of a push-over up to that point.  If you have a mutually respectful relationship with your child, then it can be as simple as setting time aside to have a conversation about your expectations of them, now that they are older.  Create a space in your calendar, prepare mentally like you would for any critical meeting with another adult, and be prepared to listen and learn.  Lead with questions, and then fill in the gaps where there is misunderstanding.  You might ask questions like:

  • How is it possible for our family to have the things we have – our house, furnishing, cars, holidays?
  • Where does the money come from and why?
  • What would happen if we had no income?

What is the cost to run our household, taking into account all the things we spend money on like rent, food, travel, vehicle, school, extra-curricular activities, and yes, the treats you want?  This question sets them up to understand that they have been on the receiving side and that there is an imbalance.  Make sure they understand that you do not regret the imbalance, but that they just need to be aware of it.

What could they do to help increase the income into the family?  This one is not about them making money for themselves, but rather, about helping to balance the scales.  This is about them stepping up into the role of an adult and learning responsibility for themselves and others.  Depending on their age, this may be an entrepreneurial venture of their own, or an arrangement to take on some of your duties to allow you to make your own advancement in your business or career, for the benefit of the family.


With this foundation, they will see a responsibility to the welfare of the family, and start to build a mindset of self-reliance for their own bigger expenses - saving for college or starting a small business, purchasing their own vehicle, and participating in extra-curricular activities with their friends.

When given the knowledge and the opportunity to live up to being an active participant in the welfare of the family, they will amaze you.  Humans live up to the expectation place on them.  When you treat them as children they will remain as such.  When you treat them as adults they grow to meet those expectations; and along the journey they learn self-reliance, confidence, compassion and responsibility.  

Isn’t that what we want for our children and the next generation, as they prepare for a world we can’t even imagine?

I hope you received some ideas you can use with young people in your life.  Remember, “the future is what you create.”

Original Source: Youtube Channel

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