Money patterns observed in early life are a primary source driving financial decision-making in adulthood.
As a child’s primary educator when it comes to money, it is important that parents teach a healthy relationship with finances, experts say.
Money habits in adulthood are set by the age of seven years, according to research commissioned by the University of Cambridge in 2013.
By the age of seven, most children have grasped how to recognise the value of money and to count it, the findings revealed. They also understand that money can be exchanged for goods, as well as what it means to earn money and what income is.
“As we are living in a rapidly changing world, shaped by social media companies, influencers and sophisticated marketing campaigns that target young people, spending is much easier than saving,” says Chaddy Kirbaj, vice director at Swissquote Bank Dubai.
“This is a daunting reality for parents worldwide who worry about their children falling into bad spending habits. However, there are a number of tips parents can use to educate their children about the value of money and foster a healthy relationship with money from an early age.”
We asked personal finance experts to show how parents can instil a healthy money mindset in their children.
Teach children that money is only a tool
It is important to demonstrate to children that while money is important, it is a means to an end, not the end itself, Mr Kirbaj says.
“Setting money as the ultimate goal is sure to result in frustration. Therefore, parents should work with their children to develop a set of personal goals and show them how money can be used to help achieve these goals, rather than simply accumulating cash,” he says.
For example, one person might have lots of hammers but never uses them for good. Another person might have one hammer but builds lots of great things to make themselves and others happy, says Will Rainey, founder of Blue Tree Savings, a company that helps parents teach their children about money.
“The same with money. It is not about how much you have; it is about what you choose to do with it that is most important,” he says.
Allow children to earn money
Allow children to earn pocket money by having to do chores, among other things, says Rupert Connor, partner at Abacus Financial Consultants.
Help them come up with a list of potential money-earning jobs they can do on their own and in their own time, he says.
“Instead of giving them whatever they ask for, reward them for doing chores such as cleaning their room or taking out the trash,” Mr Kirbaj says.
“This will instil in them the idea that to make money, they have to do something productive and worthwhile.”
Do not spoil a child, Mr Connor says. Try to create a culture so that they want to earn pocket money for good behaviour to then buy something for themselves, he says.
Talk about money in a positive way
It is so important to discuss money with children in an age-appropriate manner and not shun it as a taboo or uncomfortable topic, says Smeetha Ghosh, co-founder and chief executive of Cashee, a digital banking platform for teenagers in the Mena region.
“Unfortunately, the latter is common in many cultures, even in the Middle East,” she says.
“If children grow up thinking money is a difficult or awkward subject, this might result in them having feelings of guilt, shame or fear later in life when it comes to money matters, causing unnecessary anxiety.”
Children should also avoid hearing things such as “money doesn’t grow on trees”, “we can’t afford that” or “never talk about money”, Mr Rainey says.
If children grow up with the impression that money is bad, they are much less likely to ask questions, want to learn more or seek help when they need it, he says.
Distinguish between needs and wants
It is important for children to understand the difference between “wants” and “needs” because everything they desire might feel as if it is a “need”, Mr Connor says.
“A powerful way of broaching this topic is to talk about what they want ‘now’ versus what they want ‘most’,” he says.
“Not only does this teach children to start thinking about the effects of delaying gratification, it also gives them the power to make choices regarding their purchases by considering the consequences.”
Encourage them to be autonomous
Children crave autonomy and doing things “my way” from a very young age, Ms Ghosh says.
“So, the best way to teach them to have a positive relationship is to empower them to make their own decisions about money,” she says.
Let children make mistakes, Mr Connor says. “Maybe they spend all their money on something silly. But do not bail them out and make sure they learn their own lesson,” he says.
Giving them a steady allowance they can budget and save allows them to make decisions on a smaller scale in their childhood that can grow to become habits they have for life, Ms Ghosh says.
“Parents should work with children to create a budget to teach them the tangible positive effects of organised spending in everyday life,” Mr Kirbaj says.
“Budgeting will help children to avoid chaotic spending and, instead, empower them to spend in an organised, sustainable manner, relying on their actual financial ability, as opposed to borrowing from others.”
Focus on what makes them happy
In most cases, children will say that the things that have made them happy have been spending time with family or going on a holiday or adventure, Mr Rainey says.
“This exercise allows children to see that money is better used to do the things that really make them happy, rather than spending it all on material things to keep up with the Joneses,” he says.
Teach children the pros and cons of using credit cards
Children should know from an early age the dangers of being in debt, Mr Kirbaj says.
“As online banking and digital payments become more pervasive, paying by credit card is very easy to do, which means that falling into huge debt is also easier than ever,” he says.
“Help your children to understand that the money from a credit card doesn’t belong to them — it belongs to the bank and they shouldn’t spend money they don’t have.”
Be a role model
In the formative years, children learn by watching things and people around them. Children may adopt the attitudes and behaviour that parents demonstrate at home, Ms Ghosh says.
“So, the starting point is to make sure you [parent] are able to demonstrate a healthy and positive behaviour with your money and that your words and actions are in alignment.”
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Tearful appearance
Chancellor Rachel Reeves set markets on edge as she appeared visibly distraught in parliament on Wednesday.
Legislative setbacks for the government have blown a new hole in the budgetary calculations at a time when the deficit is stubbornly large and the economy is struggling to grow.
She appeared with Keir Starmer on Thursday and the pair embraced, but he had failed to give her his backing as she cried a day earlier.
A spokesman said her upset demeanour was due to a personal matter.
Essentials
The flights
Whether you trek after mountain gorillas in Rwanda, Uganda or the Congo, the most convenient international airport is in Rwanda’s capital city, Kigali. There are direct flights from Dubai a couple of days a week with RwandAir. Otherwise, an indirect route is available via Nairobi with Kenya Airways. Flydubai flies to Kinshasa in the Democratic Republic of Congo, via Entebbe in Uganda. Expect to pay from US$350 (Dh1,286) return, including taxes.
The tours
Superb ape-watching tours that take in all three gorilla countries mentioned above are run by Natural World Safaris. In September, the company will be operating a unique Ugandan ape safari guided by well-known primatologist Ben Garrod.
In the Democratic Republic of Congo, local operator Kivu Travel can organise pretty much any kind of safari throughout the Virunga National Park and elsewhere in eastern Congo.
Company profile
Name: Fruitful Day
Founders: Marie-Christine Luijckx, Lyla Dalal AlRawi, Lindsey Fournie
Based: Dubai, UAE
Founded: 2015
Number of employees: 30
Sector: F&B
Funding so far: Dh3 million
Future funding plans: None at present
Future markets: Saudi Arabia, potentially Kuwait and other GCC countries
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5pm: Maiden (PA) Dh80,000 (Turf) 2,200m, Winner: Zalman, Pat Cosgrave (jockey), Helal Al Alawi (trainer)
5.30pm: Maiden (PA) Dh80,000 (T) 1,600m, Winner: Hisham Al Khalediah II, Fernando Jara, Mohamed Daggash.
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War
Director: Siddharth Anand
Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
Ant-Man and the Wasp
Director: Peyton Reed
Starring: Paul Rudd, Evangeline Lilly, Michael Douglas
Three stars
New UK refugee system
- A new “core protection” for refugees moving from permanent to a more basic, temporary protection
- Shortened leave to remain - refugees will receive 30 months instead of five years
- A longer path to settlement with no indefinite settled status until a refugee has spent 20 years in Britain
- To encourage refugees to integrate the government will encourage them to out of the core protection route wherever possible.
- Under core protection there will be no automatic right to family reunion
- Refugees will have a reduced right to public funds
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5 of the most-popular Airbnb locations in Dubai
Bobby Grudziecki, chief operating officer of Frank Porter, identifies the five most popular areas in Dubai for those looking to make the most out of their properties and the rates owners can secure:
• Dubai Marina
The Marina and Jumeirah Beach Residence are popular locations, says Mr Grudziecki, due to their closeness to the beach, restaurants and hotels.
Frank Porter’s average Airbnb rent:
One bedroom: Dh482 to Dh739
Two bedroom: Dh627 to Dh960
Three bedroom: Dh721 to Dh1,104
• Downtown
Within walking distance of the Dubai Mall, Burj Khalifa and the famous fountains, this location combines business and leisure. “Sure it’s for tourists,” says Mr Grudziecki. “Though Downtown [still caters to business people] because it’s close to Dubai International Financial Centre."
Frank Porter’s average Airbnb rent:
One bedroom: Dh497 to Dh772
Two bedroom: Dh646 to Dh1,003
Three bedroom: Dh743 to Dh1,154
• City Walk
The rising star of the Dubai property market, this area is lined with pristine sidewalks, boutiques and cafes and close to the new entertainment venue Coca Cola Arena. “Downtown and Marina are pretty much the same prices,” Mr Grudziecki says, “but City Walk is higher.”
Frank Porter’s average Airbnb rent:
One bedroom: Dh524 to Dh809
Two bedroom: Dh682 to Dh1,052
Three bedroom: Dh784 to Dh1,210
• Jumeirah Lake Towers
Dubai Marina’s little brother JLT resides on the other side of Sheikh Zayed road but is still close enough to beachside outlets and attractions. The big selling point for Airbnb renters, however, is that “it’s cheaper than Dubai Marina”, Mr Grudziecki says.
Frank Porter’s average Airbnb rent:
One bedroom: Dh422 to Dh629
Two bedroom: Dh549 to Dh818
Three bedroom: Dh631 to Dh941
• Palm Jumeirah
Palm Jumeirah's proximity to luxury resorts is attractive, especially for big families, says Mr Grudziecki, as Airbnb renters can secure competitive rates on one of the world’s most famous tourist destinations.
Frank Porter’s average Airbnb rent:
One bedroom: Dh503 to Dh770
Two bedroom: Dh654 to Dh1,002
Three bedroom: Dh752 to Dh1,152
Our legal columnist
Name: Yousef Al Bahar
Advocate at Al Bahar & Associate Advocates and Legal Consultants, established in 1994
Education: Mr Al Bahar was born in 1979 and graduated in 2008 from the Judicial Institute. He took after his father, who was one of the first Emirati lawyers
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