Do you ever catch yourself falling into negative financial habits that you learned from your parents? The truth is that the “money scripts” you use to make financial decisions as an adult are almost completely formed by age 7. So, some of the good and not-so-good habits you find yourself dealing with as an adult have likely been part of how you view money from the time you were a kid. Even though it’s not possible to go back in time and reverse the financial habits you learned from parents and mentors, it is possible to focus on raising your daughters and sons to be financially empowered and to focus on positive money habits. There’s no “perfect” way to teach your kids about money, but there are a few things you can start implementing today to make financial conversations easier, and even exciting, for your kids.
Be OpenThe first and most important piece of advice I give my clients who are parents is to be – and stay – open when you talk about money. This means having honest conversations about financial “wins” and mistakes with your kids, your partner, and the other people in your life. The more you can focus on taking the negative stigma away from money, the more you’re showing your kids that financial conversations aren’t something to be ashamed of, or shy away from. An easy way to start this is by having family meetings about spending, or how you can align your spending with your family values. Giving your kids some say in where funds that have been earmarked for charity go, or discussing how some “extra” expenses will have to be carved out of the family budget if you all want to spend the time and resources to have a fun family vacation, can help them to start understanding the importance of open communication. Of course, make sure the conversations you’re having are age-appropriate. Talking to your four-year-old about the fear you feel about retirement savings or your student loans may not be the best move, but walking them through budgeting basics and values-based spending absolutely makes sense.
Address Gender StereotypesYou can also help your kids to understand gender stereotypes, and how they may or may not be helpful. Talking to both your daughters and sons about how generalizing that “women are bad at math” or “men go to work and make money for the family” can hurt others and themselves is important. Daughters need to understand their worth and earning potential, while sons need to understand to respect women and that they don’t need to carry the full weight of “providing” on their shoulders. If these conversations are uncomfortable, that’s okay. Talking about stereotypes and discrimination is never comfortable, but it’s critical that we as parents can show our kids that these stereotypes are real and may impact how they interact with the world someday.
Model and Celebrate Equality Whenever PossibleIn your family, it’s important to model and celebrate equality. The more your kids can see you and your spouse or partner treating each other with mutual respect in finances and in life, and treating others in the same way, the more they’ll be likely to model that behavior. This might look like:
- Talking openly about finances being a shared resource
- Discussing opinions about money honestly with one another and with your kids
- Treating members of a minority community financially equally
- Focusing on avoiding gender-based assumptions that your kids may pick up on
- Showing your kids that both you and your spouse or partner contribute to the family – financially and otherwise
- Having equal money rewards or rules for each of your kids
Ask QuestionsLet’s get real – as a kid, money can be super fun. They don’t have bills, debt, or the stress of whether or not a trip home to visit family for the holidays is a more important budget line-item than a much-needed getaway with your spouse in January. Nope, kids get all of the fun parts of personal finances without a lot of the extra anxiety that adulthood brings to the table. So, during this season where money is still exciting and fun, focus on making it a learning experience for your kids. The easiest way to do this is to ask questions about money often. You don’t have to force the conversation, but working financial questions into your regular conversation with your kids can be a huge help. A few questions you might want to ask them are:
- Why is that purchase (new toy, gumball, etc.) important to you?
- Where would you like to give your “donate” funds?
- What’s more exciting for you (when presented with two spending options)?
- What are you saving for? Why?
- What would you do with $100?
- How do you want to budget your money?
- Where does money come from?
- How do you want to earn money?
- What chores do you think are worth more in your allowance? Why?
Empower Them to Make Financial DecisionsMaking all of the financial decisions your kids will face for them robs them of the chance to learn, or to have the exciting feeling of making a choice about their own money. Focus on big and small ways that you can empower them to make their own financial decisions. The more they practice this now, the more likely they’ll continue to make positive, values-based decisions in the future as adults. Some decisions you might let them make on their own are:
- What they want to use their allowance for
- How they want to budget between spending, saving, and giving
- Where they want to give their money (if that’s part of their budget)
- What they’d like to ask for birthday or holiday gifts
- What type of gifts they’d like to purchase for others