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The Money Messages You Send to Your Children

I remember being a child and constantly hearing my parents talk about saving money. When I reached first grade and we learned how to count a dollar with quarters, I remember thinking that I wanted to save my quarters rather than buying gumballs like my friends. I say this to highlight the point that young children are learning/hearing messages about money every day whether that is intentional parenting or not. So think, what money messages do you want to be teaching your children?

• Are you using money as a way to leverage power?
• Are you using money as a way to show gratitude and affection?
• Does the primary breadwinner have the most power?
• Does financial stress mean conflict and tension?
• Do you see the value in 1 dollar?
• Do you see value in budgeting and saving?

Children learn from observation. Be mindful that you are setting an example because those little eyes are watching you everywhere. If you and your partner are arguing about overspending, the mortgage, private school education (etc.), your children will notice. If you use your credit card to buy dinner every time you go out, your children will observe that too. What will these observations teach about money and what are the behavioral outcomes? Behaviors could include maxing out multiple credit cards, financial secrecy/infidelity, and overspending.

Your children are picking up on all of these messages whether you mean to send them or not. If any of the above situations resonate with your own experience as children or the way you currently experience money today, it is not too late to consider how you might be portraying money to those learning from you. It is never too late to learn about money and it is never too late to teach either.

Creating an open dialogue with your children shows that money is not taboo. Money does not need to be a point of contention for parents, broadcasted to children. Identify what you want your child to know about debt, credit scores, retirement planning, etc. and have a conversation. Setting up collaborative discussions with space for openness and questions will set up a healthy relationship between you, your child, and money. Providing a safe space for your child to understand and ask questions about numbers/costs will be learned experiences that will prepare your child for adulthood.

If you are not quite sure what messages you want to be teaching your children, here are some financial planning strategies to teach children (of all ages) the value of a dollar, how to save, budget, and spend.

Early Childhood

Label three jars: “Savings,” “Spending”, and “Sharing.” Invite your child to decorate the jars In any way he/she/they feels– this peaks interest, excitement, and involvement. Instead of using a solid PiggyBank, children can place their money (commissions/allowances, gifts, sofa change, etc.) into transparent jars that allow them to compare sums. This strategy can teach children how to manage three different accounts, and can also instill familial values. Depending on the family, some might add more to future savings rather than philanthropic giving or pleasure spending. With your guidance, you can teach your child healthy familial values associated with annual giving, saving, and spending.

Help your child understand that things cost money. If your child wants a sticker book that costs $5 and does not yet understand the concept of financial transactions, go home and ask your child to take $5 out of the jar. Have your child accompany you to the store and pay for the selected item. Then facilitate a space for questions.

Pre-Teen/Early Teen

Consider shifting a weekly or biweekly commission/allowance to once a month. This will help shape long-term financial planning skills. It is important to consider what your parental response will be if your child tests the limits and overspends before reaching their goal. Will you front the money so they can reach their goal or will you sit them down and discuss what can be different next month?

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