So much of what we think and feel and believe about money was learned from our parents before we were even ten years old. The impact they have is so consequential that our financial habits as adults, both positive and negative, were in large part derived from their examples.
As parents, knowing and understanding the power we wield over our kids’ money stories means we have the opportunity to take intentional steps to set our children up for financial empowerment – an important ingredient in their long-term success.
As with any other aspect of parenting, there is more than one right way to do this, but the tips below are a great place to start if you hope to instill positive money habits in your children. And, although it is difficult to reverse deep-seated habits we learned during our own childhoods, leading our children through these lessons can help us to feel more financially empowered, too.
Keep the Lines of Communication Open
One of the easiest and most impactful things you can do for your children is to talk openly and honestly about money. This might include family meetings about spending, introducing them to basic budgeting principles, talking about your values, or even sharing financial mistakes you’ve made in the past. Your goal should be to remove the stigma around discussing money and to empower your children to ask questions and seek out information about money management.
Work to Thwart Gender Stereotypes and Model Equality
Our children are bombarded with cultural messages about money every day, and these messages often reinforce harmful stereotypes. Without an alternate script, they can easily begin to believe things like “husbands are supposed to earn more money than their wives” or “women are bad with numbers.” These generalizations, when taken to heart, can do significant damage. So, if you want to raise daughters who understand they have tremendous earning potential or sons who aren’t saddled with a weighty “provider” identity, be that voice in their heads reminding them that they do not have to be defined by gender stereotypes.
These conversations can feel uncomfortable at times, and that’s okay. Keep having them anyway. As you talk the talk, make certain to walk the walk also. Let your children see you and your spouse or partner having respectful conversations about money, making financial decisions together, and affirming that you both contribute to the family’s financial goals.
Ask Lots of Questions
Many kids truly enjoy learning about money. Without the burden of bills or anxiety about future college expenses, they have the benefit of thinking of money as fun, rather than feeling saddled with the financial baggage most adults have. Encourage their interest and their positive money mindsets by posing questions that make them think and that allow you to drive home money lessons.
For example, if you’re interested in instilling money values in your kids, you can ask questions like:
- · What types of chores do you think you might do to earn an allowance?
- · If you were able to save up $100, what would you spend it on and why would that purchase be important to you?
- · If you had to give half of your savings away to a charity, what cause would you choose and why?
Weaving questions like this into your daily conversations serve to normalize money talk, while also forcing your kids to think more deeply about what money means to them. More than likely, you’ll be surprised by some of their answers!
Let Them Make Real Financial Decisions
Asking your children hypothetical questions is a useful exercise, but when you can allow them to make real financial decisions, you’re truly leveling-up the educational value you’re imparting. You might have to fight against your natural instincts at first since many parents feel part of their job is to make smart financial decisions on behalf of their kids. Unfortunately, this means never letting your kids experience the gamut of emotions that comes with making choices about their own money. Does it mean they might make a mistake? Yes, and there is a lesson to be learned there. Successful money management takes practice, and we all make mistakes from time to time. The more your kids get the chance to practice these decision-making skills now, the likelier they will be to make savvy, values-based decisions as adults.
Here are just a few examples of the kinds of financial decisions you might empower your children to make:
- · How much of their allowance to put in their spending, saving and giving buckets
- · What they’d like to purchase with their spending money
- · Which charities and causes to donate to
If one of their decisions is different than what you would have chosen, try to approach the conversation without judgment. Get curious about their motivations and thought processes and talk through how they arrived at their decision. If applicable, you can always weave in lessons about needs versus wants and balancing short and long-term financial goals.
Celebrate Wins, Big and Small
Even as adults, we often struggle with maintaining the motivation, mindset, and work ethic required to hit our money goals on our own. Having a watchful eye, like a trusted financial planner, guiding and supporting us can make all the difference in how quickly we achieve our goals. It’s the same with our kids. They are much more likely to set and meet goals when they have an affirming parental voice in their ears. Positive reinforcement is important in helping your kids continue to make good decisions with their money, and celebrating even the tiniest of wins tells them how proud you are and creates momentum for more success.
Of course, as you celebrate wins, make room in the conversation to discuss mistakes, too. Open communication about the pitfalls we all fall into at times can better prepare your kids to move past – and learn from – their mistakes.
Are You Up to the Challenge?
Teaching our kids all they need to know about money is a tall order, and it will be challenging and frustrating at times. Know this going in, and brace yourself by keeping in mind just how important these lessons are for so many aspects of their education in both life and money matters.
If you have questions or feel in need of additional resources, please reach out and let me know. My goal is to empower YOU with the tools you need as you do the hard work of raising empowered, financially confident kids.
