Text: Steven Kempkes, economics high school teacher
Photo credit: Rogério Martins, Pexels
Just like almost every other parent, I think about the upbringing of my children. What do I want to bestow on them? What do I want to protect them against?
My wife and I are quite sensible when it comes to handling money. We do not borrow, except for the purpose of buying a house. We have saved money for unforeseen circumstances and to pay for our children's education. In other words, we do everything by the book. Our consumption pattern is in no way excessive, and we raise our children based on the idea that it's important to obtain a diploma, that it's wiser to save than borrow, and that lots of expensive stuff doesn't necessarily make you happier.
Still, it seems like the way we raise our children has much more effect on one daughter than on the other. Our eldest daughter works and saves, enjoys life, but consumes responsibly. Our youngest daughter is primarily interested in comfort and luxury. Her money has usually been spent already before it has even been deposited in her bank account.
Four types of spenders
The Dutch National Institute for Budget Advice (Nibud) distinguishes four types of spenders: the ‘big spender’ whose primary desire is to buy a lot of beautiful things; the ‘financial scatterbrain’ who can't quite figure out where his/her money went; The ‘super saver’ who leads a frugal life and saves a lot; and, finally, the ‘master of calculation’ who has a good overview of his/her finances and balances large expenses with small or no expenses. While my eldest daughter shows all the characteristics of a master of calculation with a touch of super saver, my youngest daughter has nestled herself at the opposite end of the Nibud spectrum. She is a big spender with several traits of a financial scatterbrain.
Same education, different outcome
Looking at the spending behavior of our two daughters, I suppose you could say that our effort to impart financial literacy upon our children has been successful in one case, but not (yet) in the other. You could also conclude that a financial education is essentially useless since you cannot stop the course of nature. People are a certain type of spender by nature, and there is not a whole lot you can do about it.
However, as a parent and a teacher I like to believe that what you do, makes a difference, that your actions and example affect the behaviour of your children or students. You want to make a difference, after all. To say that a financial education is useless, is not an incredibly positive message.
Fortunately, that is not the message I am trying to convey. Even if the way people spend money is a given, this does not mean that we cannot help children to limit the negative effects of their financial behavior. For example, our youngest daughter often exceeded the limit of her mobile data bundle in the past. That is why I have changed her telephone subscription to one that offers free data, so that she is no longer confronted with additional costs (and neither am I). A one-off gift from her grandmother was immediately deposited in a bank account to which she has no access, and we are encouraging her to find a side job to increase her spending room. Whether this falls under a financial education or comes closer to parental coercion, I will leave up to you to decide.