In many areas of our lives, we model our behavior after our parents. Or perhaps we set out not to model our behavior after our parents. In either case, finances are no exception. Growing up—and even now, in my 30s—I observed my parents’ behavior with money. Thankfully the financial lessons I learned by observation were responsible ones such as hard work pays off, don’t spend more than you make, always put money aside for the future, minimize debt, use your money to help those in need—both by giving to the church/charities and by being generous with those in your daily life. These lessons weren’t rocket science, but I learned them by example. Like in many homes, money wasn’t talked about explicitly when I was growing up. But I was watching. Your kids are too.
At the onset of a financial planning relationship with a new client, we devote a good bit of time to learning who our clients are, what their experiences with money have been, what their home life was like growing up and the lessons they learned. Learning these things about our clients allows us to more effectively develop a financial plan aligned with their values, which means it’s more likely to work. I often ask clients what lessons they learned from their parents about money when growing up. More often than not they say money wasn’t talked about in their home. But they always have examples of financial behaviors they see they’ve emulated, for good or for bad.
Take a second to think back about what you learned from your parents about money. Did they talk to you about money, or did you learn from example? Why is it that we often don’t talk about money in the home? Some parents feel they don’t know enough about money to properly teach their kids. Others are embarrassed about their own financial behaviors. Still, others avoid money conversations the same way they avoid a talk about “the birds and the bees”—it just seems too private.
But it’s important to note that whether you actually talk about it or not, your kids are learning lessons about money from you. And undoubtedly, they’re learning from other examples around them. We all know the example our culture sets about money is not good.
If you’d like to talk to your kids about money but don’t know where to start, here are some practical pointers:
- Work a few money tips into your daily conversations with your kids. Something as simple as, “How many hours do you think you’d have to work at Chick-fil-A to buy that pair of shoes you want?” can have a positive impact.
- Consider purchasing Dave Ramsey’s Financial Peace, Jr.and work through it with your kids. Implement a few of the principals in their/your daily life. It’s inexpensive, and even one positive lesson learned will serve them well.
- If their interest is piqued, consider looking into a class or even a summer camp where they can learn more about money and investing. Google can lead you to resources.
But above all else, work to get your own financial house in order. Your kids are watching. They will emulate your behavior—the good and the bad. Rather than beating yourself up about financial mistakes, tell your kids about them and what you learned as a result. Even if they roll their eyes, they’re listening!