Published by cijaye on 22 Sep 2010
What are you teaching your kids about money?
The majority of people inherit their beliefs and values from their parents. So along with Mum’s eyes and occasionally Dad’s nose, we are likely to become conditioned by their set of rules around money, which in turn came from their previous generation. This may work very well if your surname is Rothschild or Getty but for most of us we may be carrying around a set of rules and beliefs which no longer serve us.
Think about your own money lessons from childhood. For example, if your parents or grandparents experienced major economic events such as the Great Depression or the austere years during and after WWII, then these environmental factors will have made a lasting impression on your financial beliefs. There may be “positive” values such as thrift, saving and security or “disempowering” beliefs around scarcity, fear and an aversion to risk.
The question is, are these deep routed beliefs helping or hindering you today and what messages are you passing on to the next generation and teaching your children about money?
In the Industrial age the perceived wisdom was to study hard, get a good job and then try and hang on to it until the gold watch. People spoke freely of the ‘job for life’ and concepts such as downsizing or outsourcing were relatively unknown. The underlying beliefs were one of scarcity and lack. A safety first approach which encouraged the majority to save for their retirements with the comfort of a social security safety net.
In the Information age where the world has become in many ways smaller and flatter, both the job security and the safety net are disappearing. In preparing the next generation and teaching your children about money it is important to consider the skills, attitudes and beliefs that will be necessary to succeed.
Let’s consider an example of two children from the same neighborhood, whose parents are of a similar age and enjoy similar incomes and lifestyles. In the Smith’s household finances are discussed in hushed tones and never in front of the children. The kids witness arguments over credit cards and the stress of unpaid bills. If the child asks for things they are met with replies of “money doesn’t grow on trees” or “we just can’t afford it”.
Compare with the Jones household, here money is discussed more openly, with budgets set and adhered to. Bills are paid on time and a little is saved every month. When the child asks for treats they are encouraged to pay for it themselves out of an allowance, or to consider whether having ‘this ‘is better than ‘that’. They learn to understand the value of things as well as the price. They may be given the opportunity to work around the house or to explore other ways of earning money.
In this simple scenario it is clear which child has the better chance of growing up with empowering beliefs about money.
Children unquestionably pick up many of their values from their parents, either through conscious actions or unconscious awareness. From an early age they learn more from what they see and experience that what you may say. Through a combination of financial education and creating an environment of opportunity, your children will be better equipped for financial success. By setting an example of a positive association with money along with practical approaches I, such as saving and budgeting, you will be teaching your children lifelong money skills.
The Financial Fairy Tales series of books and resources can develop a child’s positive association with money and teaches some of the skills and values that help create a brighter financial future.
You can obtain a free digital copy of Dreams Can Come True from the Financial Fairy Tales website http://www.thefinancialfairytales.com
Daniel Britton is an author, speaker and consultant on the subjects of financial literacy and personal development. His Financial Fairy Tales series teach kids about money through fun and inspirational stories.
