Raising well rounded and confident children is certainly not an easy task. Having money conversations with your children can be very daunting. Would it surprise you that recent research tells us that children’s money habits are formed by the age of seven? The point is, it’s never too early to start engaging in money conversations.
Children learn most effectively from what they hear, see and experience. So, it’s not just about the conversations you have with your children. How you behave and what you do, also sends out specific money messages. Most of our communication is quite unintentional and we as adults have to be wary about the money messages we teach – often without intention.
Let me share an example:
I recently had a Life Planning meeting with father and son. The father reflected on money messages heard while growing up. His father taught him to work hard for his money, and with hard work, comes reward. You may consider this a positive money message, but reflect if the message would have been more powerful if it had been about “earning money by adding value”? This father, now 70 years old, is still working hard. He fears that if he is not working hard, he is not adding value and therefore not deserving of earning. And his son? Well, he works hard for his money too and both of them are now trying to work “smarter” and create a more balanced life.
I am sure many parents have deliberated on what messages they would like to pass on to their children. Imagine the possibilities for your children if they grow up with a healthy money relationship. One where they don’t measure their self-worth by how much money they have – or don’t have. One where they chose their career based on passion and adding value, rather than strictly money.
So how do we teach our children about money to inspire happy lives?
Involve your children in the transaction of money
Many parents start savings or investments for their children when they are young. Involve your children in the money that is saved for them. Teach them about investment options, the value of compound interest and get them to participate in the process.
Involve your children in saving money
So many of my retired clients are still supporting their adult children. In principle, these children view their parents as the ATM machine. Teach your children that money is earned because we add value by what we do. Encourage your children to earn their own money by doing chores or entrepreneurial activities.
Parents are role-models and children learn from example
Remember that children learn from what you do and say. Talk positively about work – it’s not a chore to resent, but an activity through which you earn money. Don’t measure your success by what you have. We don’t want our children to measure their self-worth by the car you drive or the labels they wear.
A valuable lesson is the power of the mind. Our self-talk and limiting beliefs eventually become our reality. If you keep telling yourself that you are “poor”, then this is how the story of your life will go – and probably those of your children.
Encourage an abundant way of looking at money. Repeat positive money messages to yourself, and your actions will eventually follow, and so will the messages that you pass on.
A good lesson to teach your children, is to use part of their savings for themselves to enjoy, put some of it away for the future, and the third part can be used to give-away to the less fortunate or to a specific cause.
Giving is living
Include conversations around gratitude in your family. Focus on all the things that you as a family are grateful for and discuss giving – giving brings pleasure and makes us feel purposeful.
Pay yourself first: Invest for that time when you want to make a change in life, whether it is a career change, a sabbatical or further studies. This money gives you freedom to choose.
I wish you many positive money conversations in your family! Remember, give money the attention it deserves to make money the servant in your home, not the master.
This was written by Kim Potgieter. Kim is a Director and Head of Life Planning at Chartered Wealth Solutions. Her life’s work is to help people align money with meaning to enable positive and powerful transitions. Kim is passionate about meaningful conversations and understanding one’s psychology or relationship with money. She believes that our relationship with money manifests in the type of decisions we make, and the actions we take around money.
In fulfilling this purpose, Kim writes monthly Courageous Currency Conversation blogs. If you would like to receive these blogs direct to your inbox, click here to subscribe: https://www.kimpotgieter.co.za/blog/
Kim published her first book, RETIREMEANT: Get more meaning from your money, in 2015.
Her personal website not only contains her Courageous Currency Conversation blogs, but also free e-books and reflections to download. She is a regular voice on radio and has made several television appearances. Kim loves speaking and engaging with people and has presented talks and workshops at a number of forums.