No one is doing well. Black families are doing the worst. Some of this certainly has to do with the lack of housing, jobs, and promotions opportunities for Black persons in America — however there are also cultural habits that stand in our way of accumulating what we do get. Here are 10 tips for helping your child break the cycle. 

1. What is money?

You can’t manage what you don’t understand. This is why becoming a master of money begins with understanding it’s history. Did you know that over our history, we have used salt, tea, tobacco, cattle, seeds, furs, cowrie shells, bronze, silver, and gold for money? By having your child do some research and tell you about the history of money, it allows them to see that it 1. does not grow on trees or appear out of thin air, and 2. that it is used as a way of exchanging time, services, or products. This reframing of money will help them add context to their habits. 

Once they have reported back to you the history of money, take them on a trip to your nearest Federal Reserve Bank where together you can watch money physically being made. 

2. Teach them what “consumerism” is

By definition, consumerism is “the idea that increasing the consumption of goods and services purchased in the market is always a desirable goal and that a person’s wellbeing and happiness depend fundamentally on obtaining consumer goods and material possessions.” -Investopedia (a dictionary for investors)

So what is this saying? Basically, we are being pushed to “consume” or buy as much as we can afford, and there is a coordinated effort by capitalist forces to make us feel like we need to be buying “things” to make us happy. 

No group has gotten trapped further in the maze of consumerism and spending instead of saving than the Black and Hispanic communities. The only way to break out of the matrix is to first know that you’re in it.

3. Talk Wants vs. Needs

Sometimes the lines between what we “want” and what we “need” can become blurred. For anything your kid begs for, ask them if they need it, or if they just want it. Ask them “why” for whatever their response is. If you ask “why” 2-3 times, not only will you usually learn more about what your kid cares about, you will often be able to figure out what is going on in their life, at school, and with their friends, by drilling down on why that item is important to them.  

Although they may get frustrated, whine, or fuss about it – this will also have the lasting impact of making them ask themselves whether they want or need something. 

4. Help them understand how money is made

To dispel this myth that money just appears out of nowhere, it is helpful for kids to see how time is traded for money from an early age. Take them to work and explain how your work over that 8 hours produces X amount of money that you have to use for bills, food, and housing. Then, what is left is where all the things they want comes from. Connecting the dots between what they want and you having to work more hours to get it for them equips them with a financial conscience. They may still ask, but they will have a much better understanding of why you’re saying “no.”

 For an even better understanding, have your child shadow a few different people and job types. Them doing manual labor will create a whole new appreciation for that bike they wanted. 

5. Help them understand privilege

It may not feel like it, but in America we have a natural privilege that comes with being in a first-world country. That is to say that we are not in an actual war zone or civil war like 40 countries currently are. This means that unlike someone growing up in Syria, Afghanistan, Iraq, and many other countries around the world, we have access to basic life needs, social services, and do not have to worry about a bomb hitting our house. This context is important for youth to understand since they evaluate what they have in life against what they know. If they think they have it the worst in the world (like every teenager does), then that is the yardstick that they are measuring your actions as a parent against. 

If possible, have them travel to a less fortunate country for mission trips, volunteering, or working. It will be harder for them to complain when their understanding of what “bad” is equates to carrying drinking water 3 miles, or digging water wells, versus not getting the new Jordans. 

6. Give them the responsibility of a bank account

The best way to learn it is to do it. Set them up with a checking or savings account so they can not only build good habits but – let’s be honest – make mistakes. It’s better they make mistakes earlier than later.  

To further encourage them to “do the right thing,” you can offer savings incentives. Try giving them a bonus when they reach a certain milestone. Or match whatever they put in up to a certain dollar amount like a 401(k). 

7. Have them track spending

Once they have a bank account or low-limit credit card, have them give you a report on their spending and how it drove their objectives forward or made them a better person. You have to build this critical thinking.  

8. Act as their creditor

If they need money, do not just give it to them, issue them a loan. Write up an agreement and have them sign it. Add interest based on how long they want to stretch out the payment. Have payoff conditions through chores. Which brings us to…

9. Put chores on a credit system

Treat chores like a credit score. Track the chores they have done, adding points to their score when they successfully complete them (especially consecutively) and deduct from their “chore score” when they miss a chore. Their ability to get items they want, or the terms of their parent loans, is determined by their current “chore score.” Even whether they can go see friends and hangout at sleepovers would reference their score. In this way, you are able to relate it to a credit score in almost exactly the same way their credit score will work.  

10. Have them make and sell something

Nothing makes you appreciate money and spend it wisely like having to make it yourself. While they may be too young to work formally, you can still have them earn their own money by having them start a venture where they get a “loan” to buy supplies, and then create value by selling that product or service. Have conversations with them about what their profit margins will be and how they plan to re-up their supply or invest in growing their business. Learning how hard it is to make money, and all of the considerations required, will give them a much better appreciation for how to spend and save it. 

For more ideas on how to develop your child’s skills, visit https://royalenetwork.org/ or reach out to the Royale Cohesive Network team for information on events.