The influence of our parents in shaping our thoughts, emotions, and beliefs about money begins at a young age, even before we reach ten years old. Parental impact is so significant that our financial behaviors in adulthood, whether positive or negative, are largely derived from the examples they set. As parents, recognizing and understanding the power we hold in shaping our children’s relationship with money presents us with an opportunity to raise financially empowered children, which is a crucial element for their long-term success.
When it comes to parenting, there isn’t a singular correct approach. However, the following tips serve as an excellent starting point if you aspire to instill positive money habits in your children. Although it may be challenging to reverse deeply ingrained habits from our own childhoods, guiding our children through these lessons can also enhance our own sense of financial empowerment.
Raise Financially Empowered Children: Establish and Maintain Open Lines of Communication
Engaging in open and honest conversations about money with your children is one of the simplest yet most influential actions you can take. This can involve holding family meetings to discuss spending, introducing your children to fundamental budgeting concepts, sharing your values regarding money, and even being transparent about any financial mistakes you’ve made in the past. By doing so, you aim to eliminate the taboo associated with discussing finances and empower your children to feel comfortable asking questions and actively seeking information about money management.
Raise Financially Empowered Children: Deconstruct Gendered Stereotypes by Modeling Equality
Every day, our children are exposed to a barrage of cultural messages surrounding money, many of which perpetuate harmful stereotypes. Without an alternative narrative, they may easily internalize beliefs such as “husbands should out-earn their wives” or “women are not good with numbers”. Echoing these generalizations can inflict significant harm. Therefore, if you desire to raise daughters who recognize their immense earning potential or sons who are not burdened by a rigid “provider” identity, be the voice in their minds that reminds them they don’t need to be defined by gender stereotypes.
Engaging in these conversations may sometimes evoke discomfort, and that’s a healthy thing. Persist in having them, nonetheless. As you vocalize your beliefs, ensure that your actions align, as well. Let your children witness you and your spouse or partner engaging in respectful money conversations, making financial choices together, and affirming that both of you contribute to the family’s financial aspirations.
Raise Financially Empowered Children: Guide the Conversation by Asking Engaging and Thought-Provoking Questions
Many children genuinely find joy in learning about money. Free from the weight of bills and worries about future expenses, they have the advantage of perceiving money as something exciting, rather than being burdened by the financial baggage that most adults carry. Nurture their curiosity and foster positive attitudes towards money by posing thought-provoking questions that allow you to impart valuable financial lessons and raise them as financially empowered children.
For instance, if you wish to instill money values in your children, you can ask questions like:
- What kinds of chores do you think would be fair to do in exchange for earning an allowance?
- If you managed to save $100, what would you choose to spend it on and why is that purchase significant to you?
- If you had to donate half of your savings to a charitable cause, which cause would you select, and what motivates your choice?
By incorporating questions like these into your everyday conversations, you normalize discussions about money while also encouraging your children to contemplate their personal perspectives on its meaning. Prepare to be pleasantly surprised by some of their answers!
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Raise Financially Empowered Children: Find Opportunities to Let Your Children Turn Their Lessons into Action
While hypothetical questions can be valuable, allowing your children to make real financial decisions takes the educational value to the next level. Initially, it may require you to overcome your natural instincts, as many parents believe it is their responsibility to make sound financial choices on behalf of their kids. Unfortunately, this approach deprives children of the full range of emotions that come with making decisions about their own money.
Does this mean they might make mistakes? Yes, and there are valuable lessons to be learned from those experiences. Successful money management is a skill that improves with practice, and we all make mistakes from time to time. The more opportunities your children have to practice decision-making skills now, the more likely they will become adept at making astute, values-based choices as adults.
Here are a few examples of the financial decisions you can empower your children to make:
- How much of their allowance should be allocated to spending, saving, and sharing.
- What they would like to purchase using their spending money.
- Which charities and causes they would like to support through donations.
If one of their decisions differs from what you would have chosen, try to approach the conversation without judgment. Instead, express curiosity about their motivations and thought processes, and discuss how they arrived at their decision. When relevant, you can incorporate lessons about distinguishing between needs and wants, as well as balancing short-term and long-term financial goals.
Raise Financially Empowered Children: Celebrate Wins and Show Grace When Mistakes Happen
Even as adults, we often face challenges in maintaining the motivation, mindset, and work ethic necessary to achieve our financial goals independently. Having a vigilant guide, such as a trusted financial planner, can make a significant difference in how quickly we reach our objectives. The same principle applies to our children.
They are more likely to establish and accomplish goals when they have a supportive parental influence guiding them. Positive reinforcement plays a crucial role in helping your kids consistently make sound financial decisions, and celebrating even the smallest victories communicates your pride and generates momentum for further success.
However, as you celebrate achievements, it’s important to create space in the conversation to discuss mistakes, as well. Open communication about the occasional missteps we all encounter can better prepare your children to move beyond these challenges and learn from them. Helping them bounce back from mistakes is a critical element in raising financially empowered children.
Are You Intentionally Raising Financially Empowered Children?
Raising financially empowered children and preparing them with comprehensive knowledge about money is a significant task that comes with its fair share of challenges and frustrations. However, it’s crucial to recognize the importance of these lessons, as they greatly impact various facets of their education, both in life and financial matters. Embrace this journey with determination, knowing that you are equipping your children with invaluable skills for their future.
If you’d like more guidance and support in cultivating a solid financial foundation for your children, we can help! At Flourish Wealth Management, our team of professionals is dedicated to helping families navigate the complexities of money management, ensuring a prosperous future for the next generation. Take action today and empower your children with the financial education they deserve by giving us a call. We look forward to hearing from you!