With technology pumping out new gadgets a mile a minute and regulations changing by the second, it’s easy to think that financial literacy is never truly grounded in the traditional. This isn’t quite the case, however—the way people handle money may advance in some ways, but it is also always tied to what’s been done before.
What’s tradition, anyway?
Tradition, simply put, is any activity that people repeatedly do at a specific interval of time in recognition of something. Usually, it captures and preserves one or more of the beliefs that a group has, or even more broadly, that an entire culture has. It also usually is attached to something that has happened in the past, which for whatever reason, the group thinks is important, so it is a basic way to maintain a connection to the group’s history. Decorating Easter eggs is a good example, but traditions are often unique to families or even individuals, such using only grandma’s baking tins when making a birthday cake.
How does tradition tie to financial literacy?
You might not associate tradition with being money savvy, but the two ideas are actually very closely linked. First, over time, traditions become habit. In some cases, they can become so engrained in a way of life that people no longer can imagine not engaging in the behavior, and they form an expectation that they’ll carry it out again in the future. Generations repeat the activity simply because “this is the way it’s always been done.”
The trouble is, this can blur the line between need and want. If your family has always spent an arm and a leg on the annual Christmas tree, for example, then the odds are pretty good that you’ll start seeing that expensive tree as a must have item. Even if you recognize that the tree is more of a want, you might still splurge for it, just because you don’t want to disappoint your partner, kids or other relatives. Consequently, less goes into your savings bucket.
Secondly, tradition sways basic social financial practices. In some parts of the world, for example, it is still tradition for certain ethnic groups to connect marriage and money through the exchange of a dowry, and some religions feature traditional house blessings where money is brought into the new home to invite future prosperity. On holidays, banks often close. When these types of customs are very deeply embedded, it can make spending money or treating it in a certain way feel very natural, which can make it difficult for people to explore other financial methods or options.
How does this relate to teaching kids about money?
When you are a parent, you are the one your kids look to in terms of forming and accepting traditions. Although no tradition is necessarily right or wrong, you do have a responsibility to show your kids that culture and money are never separate, and that following specific traditions often requires good budgeting and planning. It’s a good idea to talk to them about why you think that a particular activity is worth spending money on and where it fits into your family’s financial priorities.