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Financial literacy is essential for your children’s future well being and success. Children who understand personal finance will have an advantage during their adult lives.

Help your child start young, while it’s easy and there are no bad habits to overcome.

Learn the Fifteen Financial Life Skills Your Children Need to Know by reading this Tip Sheet.

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The Financial Life Skills Blog for Families by Nancy Phillips

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Children's Financial Education - Why Spoiling Hurts Your Kids


Nancy Phillips, author Zela Wela KidsHow you live your life is fundamental to what you will teach your children about money and it will create their “blueprint” or programming for life.

Nothing demonstrates a point more clearly than a personal story and this one gives a clear picture of a “wealthy” man’s feelings of emptiness and confusion. This thirty-something gentleman explained, “I know I can’t ask people to feel sorry for me because I grew up in a wealthy family, but I have no idea how to hold onto money. I spend what I make and the stuff I buy doesn’t mean anything, it’s just what I’m used to doing. I have no idea how to change where I’m at.” The expression in his eyes was not only one of unhappiness but that of a person who is feeling “lost.”

Unhappiness is often due to a lack of self-discipline, especially when it comes to money. Learning to be personally responsible for our actions and thus our lives is critical for everyone, and it’s much easier when the lessons start in childhood.

Kids and Money

The Effects of Overindulgence

Don’t feel guilty about saying “no,” in many ways, you may be doing your child a big favor. You’ll be surprised how resourceful they can be when they know it’s up to them to come up with the moolah. Plus, it has been shown that delayed gratification is a very important part of a person’s emotional development and long-term happiness.

When a person desires something and knows they have to figure out how to come by it on their own, it kicks off a series of questions and ultimately leads to setting a goal and taking action to achieve that goal. If the person is simply given the item, none of these problem solving or actions steps take place. Neither does the self-esteem which comes with achieving a personal goal. Dr. Bredehoft at Concordia University has done a great deal of research on this. His conclusion is simply: if you want your children to be self centered greedy adults, overindulge them. If you want them to grow up to be caring, thoughtful and happy adults, don’t overindulge them.


Spoiling and overindulgence can prevent your children from learning numerous vital lessons including:

  1. Understanding family values – your child’s behaviour and ultimately their purpose will be consistent with their values. This will shape their life goals. Are you clearly communicating your values through your daily actions?

  2.  The increase in self-esteem and confidence that comes with setting and achieving goals. Learning how to figure out solutions, be resourceful and truly “think through” a challenging situation is critical for creating this capability in the brain.

  3. Learning the self-discipline and self control necessary for saving and making wise spending decisions early on. Once a bad habit is “learned” by the brain, it is difficult to change.

  4. Taking responsibility for their own actions and understanding the long-term consequences of their choices.

These lessons are the beginning steps of “life management.”

 How to help your child create good money habits

Like I discussed with the young man above, learning to manage your money wisely can bring relief, hope and excitement because you are able to physically see how your dreams and plans can become a reality. He also agreed it would be helpful for him to spend less time shopping and more time outdoors and with friends and family.

 The Give *Invest*Save*Spend (GISS) Method of Money Management

This system is powerful in its effectiveness and a wonderful place to start, especially with children. Why? Because it’s simple and fun. It incorporates counting, goal setting, visualizing, and most importantly for learning, experience and repetition. When your child receives "income," sit down with them and help them divide their coins and dollars into these four categories:

Give (10%)

Philanthropy is known to increase inner happiness and self-esteem. Giving is one of the greatest joys in life and a powerful lesson for children. Helping others not only teaches your children empathy and how to be kind to others, it also helps them learn to appreciate their own lifestyle and develop a sense of gratitude.This is a chance for you to talk about how they can make a difference in the world, and I can almost guarantee you will be inspired by their words!

Invest (15%)

Investing is essential for people to ensure they will have a secure income and good lifestyle as they get older. Many people make the mistake of just having “savings” and then spend the funds on expensive material items leaving nothing for them to live on in retirement. Investing is an abstract concept for really young children but can be learned about gradually. Initially this segment can be explained as the money they grow and use when they are older.


Save (25%)

It is critical that children and adults learn to set and achieve goals and that goes for the financial part of their lives as well. As a child works toward their goal, whether it’s saving for a bike or a toy of some kind, they learn the steps to achieving their goals. When they do achieve the goal, they are proud and feel confident and excited to set a new goal. Parents need to give their children the opportunity to set and achieve small goals so they are inspired and feel confident to pursue their life goals.


Spend (50%)

This is the money for expenses if you’re an adult and basic spending money for treats and so on for children. Once a child uses their own money for purchases they begin to consider the cost and value of things. They will learn more about needs and wants, buyer’s remorse and the feeling of "running out." These lessons are far better learned at a young age with small amounts of money than in college when it may lead to thousands of dollars of credit card debt.

 The Benefit for You

The “GISS System” of managing money is a wonderful way to get your children started on the path of learning to handle their money wisely. It will give you the opportunity to discuss values, why they are saving for something special, what charity they would like to help and many more meaningful discussions. By having their own money to spend, it will not only cut down on their requests to you for more money, they will begin to learn age-appropriate responsibility and self-discipline, both of which are critical for long-term financial well being in adulthood. The parents benefit from their children's lessons as well! See this mom's story on how the GISS system helped her daughter.

All the best as you travel this path of financial education with your children.

Zela Wela Kids Build a BankThe first story book in the Zela Wela Kids Build a Bank series teaches children more about the “GISS System” and how to build their own “GISS” bank at home which they can then use. If you like, go ahead and send me a picture of your child’s bank so we can all see their great work!


Good Money Habits Critical before the Teen "Info. Overload" Years


Nancy Phillips, author Zela Wela KidsIt's interesting (and often disconcerting) to watch teens and pre-teens these days with their rapid fire texting and continuous communication.  I read a fascinating article last week in Newsweek called “I Can’t Think!”  It really got me thinking (pun intended) about the challenges our younger children will face in the years ahead when making decisions amidst their busy, highly stimulating teen lives.

Children's Financial Education

The part of the brain responsible for decision-making and the control of our emotions is called the dorsolateral  prefrontal cortex. Evidently, it can, and frequently does, go into overload. Studies have shown that when subjects were given continuous information on a topic, there comes a point when the activity in the dorsolateral PFC essentially shuts down and people begin to make stupid decisions. Not surprisingly, their emotions then escalate skyward.

This fact has been proven to impact people's decision-making effectiveness in a variety of ways, including decisions made around the topics of finance. In a 2004 study, researchers at Columbia University found that when people were given more and more choices for their 401(k) investment plan, the participation rate fell significantly. People became overwhelmed and many chose to make no investment at all.

Here are a few key points from the article that will very likely impact our children:

*Too much information can lead to bad decisions because the brain goes into overload

*Constant data influx prevents our subconscious the necessary time to make sense of the information we’re receiving (thus inhibiting “instinctual” knowledge from providing input)

*The world is demanding quick decisions over good decisions due to the increasing number of decision that need to be made

How does this pertain to our children and the need for financial literacy?

When you consider something as important as being able to think through a decision effectively, especially financial decisions, this research information implies the importance of instilling good values and the basic fundamentals of handling money while children are young enough to “take it all in.” They need to know the difference between a need and a want, what good value is and in contrast, what is a waste of money. By learning these basic concepts, they develop a framework within which they can make their decisions today and in the years ahead. As parents, we teach our children about dangers and how to make decisions about safety, how to care for themselves and how to be kind. We also need to make sure they are armed with the necessary information to make good financial decisions from well developed habits and clear family values.

The financial literature shows that children tend to develop their “blueprint” towards money and their habits with money by the age of 13. Children are constantly learning by observation whether we are actively teaching them how to handle money or not. And, like it or not, young children are much more likely to listen to us and spend more time with us when compared to a teenager. This time together provides the opportunity for lessons to be learned, practiced and repeated - all necessary factors for effective, long-term learning. The early years are the time to take action when the risks are low, before credit and debit cards become a part of daily life.

Start your child's financial education now. Click here to read the article "How to be an Effective Money Teacher to Your Kids."

How to be an Effective Money Teacher to Your Kids


Nancy Phillips, author Zela Wela KidsIf you’re like many parents these days, you have probably been wondering about the best way to begin teaching your children how to manage their money. That's a good thing, because parents are the first and most influential financial teachers a child will have. It's important not to assume someone else will teach them the fundamentals.

What are some of the key factors we need to keep in mind as we teach our children the basics of how to handle money wisely?

Kids financial education

1. Age-appropriate responsibility

 We can help prepare our children for the future by providing a map that will help them navigate life’s twists and turns. We teach them how to care for themselves, keep their personal space clean and all the other “basics.” We also need to make sure they learn to handle and make good decisions with money. Be prepared to “let go” a little bit so they can learn to be responsible through this experience. With a young child for example, let them use their spending portion of their money freely. Try not to object to their purchase unless there is a safety issue or the item is not in line with the family values. This newfound responsibility tends to lead to very thoughtful outcomes. Read about one mother’s delight.


2. Be supportive

“Mistakes” are often the best learning opportunities. Help your children see the lessons within the experience. It is critical for a child to feel secure and not fear failure; this is how they gain knowledge which will aid them in future decisions.  Scientists are the perfect example of this. What if they simply gave up after the first trial of their experiment didn’t have the outcome they desired? We wouldn’t see many new discoveries or inventions would we? “Mistakes” are really outcomes that are perceived as negative because it isn’t the outcome the person wanted.  The feedback given from that outcome is the crucial element to learning. Using the information gained from the experience is critical to moving toward the end goal.


 3. Creative thinking is a critical life skill

Now more than ever, children must be encouraged to be “thinkers.” Research shows that “flexibility” and the ability to “recognize patterns” of change are the two most important characteristics to be successful in this rapidly changing world. Help your children look at different options for various situations they face, so they learn to develop alternatives when they have decisions to make. Children are naturally creative; it is in their long-term best interest to help them learn to truly “think through” a decision. You can even make a game of it and see how many alternatives they can come up with. Be sure to write them down for maximum impact.


 4. Be very aware of what you are saying

Every day your words are having a major impact on your child whether you realize it or not. Try to use open “idea” words as opposed to negative, “closed” comments. For example, instead of responding “we can’t afford that toy,” you could say “how do you think you could raise enough money to buy that toy?” A child’s “blueprint” or attitude towards money and their habits with money tend to develop by the age of thirteen, so it is important the child does not have a negative emotional feeling towards money during those early years.


5. Build self-esteem and self-confidence by soliciting your children's input and valuing it

Whether it’s listening to their ideas about what they’re saving for or discussing what charity they would like to give to, when a parent is deeply engaged in a child’s plans, it has profound effects. Their self- esteem increases because they feel their thoughts and opinions matter, and you benefit by getting to know your child and sharing their life and dreams with them.


6. Celebrate successes

Discuss why their accomplishment is such a great success. This will “fuel their fire” and you will see their excitement to set the next goal. It isn’t about going out for a fancy dinner or buying them something as a reward; it is about the internal pride they feel and the realization of their own capabilities. Children find setting and achieving goals fun because it is like a game they can’t wait to play again. As a parent, we want to help inspire that drive and passion so they continue to live life to the fullest as they grow and mature.

Click here for a list of 15 Financial Life Skills you Children Need to Learn

10 Serious Money “Don’ts” for Parents Teaching Their Kids about Money


Nancy Phillips, author Zela Wela KidsParents are the first and most influential financial teachers in their children’s lives. Here are some key mistakes to avoid and ideas on how you can help your children get off to a good start.

 10 things you don’t want to do at home:

1.      Consistently talk negatively about money

Money is a tool and something that is used every day in our society so it is critical your children don’t grow up with negative feelings towards it. Times are tough for many families so it is even more important than ever for parents to think about how they answer their children’s money questions. Robert Kiyosaki, the bestselling author of the Rich Dad book series, discusses the long-term negative impact certain statements can have on a child. In Rich Dad Poor Dad for Teens he comments, “Say this sentence: I can’t afford the things I want.” Now say: “How can I afford the things I want?” One statement stops you from thinking. The other revs your brain and gets you thinking.”


It’s very beneficial to the child if parents can give answers which encourage problem-solving instead of a feeling of discouragement. “Let’s think of some ideas of how you might be able to raise enough money to buy that …” is empowering for the child and inspires them to use their imagination and natural talents. Children can earn money by babysitting, making and selling jewelry and hundreds of other ways. To get more ideas check out The website focuses on helping children learn about entrepreneurialism.


2.      Give mixed messages through mindless purchases

In general parents want their children to value and respect their belongings. However, if the parent is inadvertently showing the child the opposite actions by being wasteful and overconsuming products, the child learns that wastefulness is alright. When a child grows up thinking the parents can just pull out a credit card and “get another one,” they are less likely to appreciate the true value of something.  On the other hand, when a parent plans out their purchases and is thoughtful before buying items, the children are able to see how decisions are made. Over time the child will learn to consider the alternatives and be a more responsible decision-maker.  Bottom line – parents have to “walk the talk.” Children are observing their parents buying habits regardless of the type of purchase.

 GISS Method of Money Management

3.      Forget to teach them how to manage an allowance

Learning from experience is the best way for children to pick up the real life lessons involved in managing money including decision-making and setting priorities. If you are wondering how to teach them to divide up their money so they won’t spend it all, you could try the Give*Invest*Save*Spend (GISS) method of money management. It’s simple, fun and effective, even with children as young as five. The “spending” category teaches children there is a limit to how much they can spend and gives them practical experience that will help them develop good habits.


 4.      Overindulge Your Children with “Stuff”

Saying “no” is alright; in fact it’s been proven to help your child learn to be more resourceful and ultimately, happier. Delayed gratification is a very important part of a person’s emotional development and long-term happiness. Studies show that giving a child everything they want as they grow up often leads to them feeling very unsatisfied and unfulfilled as adults. Dr. Bredehoft at Concordia University has done a great deal of research on this. His conclusion is simply: if you want your children to be self centered greedy adults, overindulge them. If you want them to grow up to be caring, thoughtful and happy adults, don’t overindulge them.


What if you work long hours and want to give your children something to make up for your time away? Give them You. If you don’t have a lot of time with your children, instead of buying them things to make up for it, use the together time for meaningful talks and experiences so they can learn life’s lessons from you.


 5.      Pay your children for good marks

The internal satisfaction experienced from achieving goal is important for children of all ages, as is the self-esteem gained from the event. The practice of paying children for marks may seem enticing if you have a student with no desire to study, but it can have severely negative consequences if they begin to expect to be paid each time they reach a goal, especially if you set it. Many of the most rewarding goals in life don’t involve money and to think every effort in life will be compensated is very misleading.


 6.      Forget to look for teaching moments

Whether it’s helping count the money for the cashier at the store, making the tip at a restaurant or writing down your purchase on your daily expense sheet – involve your children. Talk to them about the coins and dollars and what they're worth. This is one of the reasons allowances are such a valuable tool. Children not only learn about managing their money and making buying decisions, they also get the opportunity to add and subtract in real life situations.


7.      Forget to track and manage your spending

Know your cash flow. Writing down all daily purchases is an eye-opening experience for many people because it shows them how all the “little” things add up. They finally see where their money is going. David Bach, bestselling author of The Automatic Millionaire calls it The Latte Factor. The small amounts of money that are wasted daily can make a huge difference to people if they use the money wisely instead.

Knowing how you spend your money and showing your children that you keep track of it will be an invaluable lesson for them and save you thousands of dollars per year. Understanding your cash flow is critical to long-term financial success. When you combine this knowledge with your spending plan (budget), it allows you to successfully plan for and achieve your financial goals.


8.      Forget to use cash in front of your children

It’s very hard for a child to learn about money if they never ever see it. This is one lesson parents can start right away. Studies also show that you will be more likely to make better purchasing decisions and spend less. Many pre-teens and teens these days are not comfortable “making change” because they didn’t have any experience with cash growing up. Basic counting and numeracy skills need to be taught to young children. Using cash is an excellent way for your children to gain this experience.


9.      Loan them money for a toy they are saving for

This sets a dangerous precedent by teaching children it is alright to borrow money to buy “wants,” things that are non-essential. "Bad debt" in the form of credit card debt may then begin to occur once the child is a teenager with new access to a credit card.

Parents often tell me how bad they feel if they don't buy the things their children "really" want. It's important for parents to understand that it really is alright for a child to have to wait to buy a toy or other non-essential items. In fact it’s good for them to develop the patience and self-discipline (see #4 above.)


 10.  Celebrate by spending

Yes, it’s fun to go out and celebrate a special occasion at a restaurant or buy something new but it’s very important for young children to see that you don’t have to spend money to have fun. Again it comes back to sharing your values. If family, friends and experiencing things together are your priorities, make sure your children know this. It’s very worthwhile to go through your key values with your children so they understand why you make the decisions you do. As bestselling author and motivational speaker Brian Tracy says, “children spell love T-I-M-E.”






Parents Benefit Too When Young Children Learn to Manage Money



Yes, it’s true. Parents enjoy a lot less stress regarding requests for toys, clothes and money in general once a child begins managing their own funds. Thankfully, the negotiations frequently turn to thoughtful discussions about value, choices, priorities and planning.


The last few posts we discussed the Give*Invest*Save*Spend (“GISS”) Method of Money Management.

 GISS Money Management Method

Here’s what one happy mom had to say today:



“Hi Nancy,


I wish we had “Built a Bank” sooner, it would have stopped so much begging for me to buy my daughter Lauren (8) things.  Now she manages her own money and is learning for herself the value of a dollar.  In fact last week she wouldn't buy some earrings because they cost too much.  She learned the hard way about how much taxes are.  It's a beautiful thing, I am learning to let go of trying to control what she spends her money on and am letting her make her own choices, and, at the same time she is making amazing choices.


I remember humming and hawing about giving Lauren an allowance and how to teach her about spending and saving...then I realized, why am I trying to reinvent the wheel here.  Nancy has already done all the research and I just have to trust in and follow her lead.  It's working out amazingly well!



Nicola King”


And thank you for sharing your story Nicola!

If you have a story to share with us, please let me know!! It's wonderful to hear how your children are achieving their goals and having fun doing it!!

Click for more information about the GISS Money Management Method


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